BANKING
Barclays pulls out of Africa
Barclays has pulled out of Africa six years after first announcing exit plans, confirming the sale of its remaining 7.4% stake in South African lender Absa. This brings an end to its retail banking presence on the continent that had stretched to 97 years. Barclays raised around £538m from the sale - but reported a loss of £31m through its income statement, suggesting it has taken a hit from selling off its stake. Former chief executive Jes Staley outlined plans to make a strategic exit from Africa in 2016, with Barclays looking to refocus the bank on its core UK and US markets. This also involved proposals to close smaller operations in Asia, Brazil, Europe and Russia. The plan meant getting rid of its 62% stake in Barclays Africa, which was a merger of Absa and Barclay's African operations. Barclays was South African's biggest lender until 1986 when it quit the country in the midst of apartheid, before restarting its operations in the country with its corporate and investment banking division in 1995.
INTERNATIONAL
Credit Suisse looking to cut around 5,000 jobs
Sources say Credit Suisse is considering cutting around 5,000 jobs, a figure equivalent to around one position in ten. Expectations of job losses have been growing since July, when the bank announced a review alongside the promotion of Ulrich Körner to chief executive. The bank said the review would focus on scaling back its investment banking division into a “capital-light, advisory-led” business. A spokesman said: “Credit Suisse maintains a world-class, leading investment banking franchise globally. We have said we will update on progress on our comprehensive strategy review when we announce our third-quarter earnings; any reporting on potential outcomes before then is entirely speculative.”
FINANCIAL SERVICES
Harris confirmed as new Pensions Ombudsman
The Department for Work and Pensions has confirmed CMS partner Dominic Harris as the next Pensions Ombudsman. He will take on the role from January 16, replacing Anthony Arter. Mr Harris’s appointment was approved by the Work and Pensions Committee in July, with MPs saying he “has the personal independence and professional competence” to take on the role. Mr Harris commented: “The ombudsman has a key role to play in ensuring access to justice in the pensions arena, and I am proud to be able to continue the good work of Anthony and his team at the organisation.”
LEISURE & HOSPITALITY
Patisserie Valerie to shut nine cafes
Patisserie Valerie has confirmed that it will shut nine cafes that have not recovered “as well as expected” following the pandemic. The firm said it has “faced a period of unprecedented challenges in recent times”. It said it will now shut nine patisseries following a review of its store estate.
MANUFACTURING
Manufacturing PMI shows contraction in August
British manufacturing production and new orders collapsed in August, according to the S&P Global/CIPS UK Manufacturing PMI, with output seeing its largest contraction since May 2020. The PMI dropped to 47.3 from 52.1 in July on an index where numbers above 50 represent growth and anything lower points to a contraction. S&P Global says companies experienced a steep downturn in new orders in August, with interest from domestic and overseas clients falling heavily. This saw a decline in new jobs and a drop in business optimism. Gabriella Dickens, senior UK economist at Pantheon Macroeconomics, says August’s PMI data "suggests that a recession is developing in the manufacturing sector.” James Brougham, senior economist at trade body Make UK, says the data serves as a “warning shot” for the Government. “Immediate intervention is necessary to mitigate the worst of the economic damage to the industry's fabric,” he added.
MEDIA & ENTERTAINMENT
CMA probes Microsoft’s Activision Blizzard deal
Microsoft is facing an in-depth investigation by the Competition and Markets Authority (CMA) over concerns about its £60bn takeover of videogame developer Activision Blizzard. The competition watchdog is set to refer the deal for a Phase 2 investigation, raising the prospect that it could be blocked. With Microsoft making the X-Box console, the CMA is concerned that its acquisition of Activision Blizzard's brands would unfairly harm rival Sony, maker of the PlayStation.
REAL ESTATE
House price growth slows to 10%
UK house prices rose by 10% in the year to August, data from Nationwide shows, with this a slight dip on the 11% year-on-year growth recorded in July. The increase, which marks the tenth consecutive month of double-digit annual growth, takes the average house price to £273,751. Month-on-month, house prices rose 0.8% in August. Robert Gardner, Nationwide's chief economist, said there are signs that the housing market is “losing some momentum," adding: “We expect the market to slow further as pressure on household budgets intensifies in the coming quarters, with inflation set remain in double digits into next year.” Noting that the Bank of England is expected to continue raising interest rates, Mr Gardner said this will “also exert a cooling impact on the market if this feeds through to mortgage rates, which have already increased noticeably in recent months."
RETAIL
Top Richemont investors set to vote against activist’s plan to shake up board
Several leading investors in luxury group Richemont are planning to vote against proposals from activist investor Bluebell Capital Partners that would see a boardroom shake-up and challenge chairman Johann Rupert.
ECONOMY
Sterling's slump against the dollar the biggest since 2016
Sterling has suffered its biggest monthly fall against the dollar since October 2016, having fallen by 4.6% in August. The pound fell further on the first day of September, trading down 0.5% at $1.1564. It has lost over 14% against the dollar so far this year. August also saw sterling suffer its worst month against the euro since May 2021. Viraj Patel, global macro strategist at Vanda Research, said: “It seems like a bit of a perfect storm now for the pound.” Michael Hewson, chief markets analyst at CMC Markets, suggests that this is “not just sterling weakness - it's a dollar strength story.” He added: “Sterling has its problems, but they are not unique to it - high inflation, surging energy prices and falling disposable incomes.”
High inflation bad for productivity, warns BoE policymaker
High inflation risks distracting businesses from issues needed to boost productivity, Bank of England policymaker Catherine Mann has warned. Speaking on a Productivity Institute podcast, she told academics that very high inflation “has many downside consequences.” “In a high-inflation environment, firms are scrambling to figure out what their best pricing strategy is. Productivity, on the other hand, comes when firms are focusing their attention on their products, their people, their investment choices and their global and domestic market opportunities," she added.