BANKING
NatWest gives 22,000 workers a £1,000 pay rise
NatWest has followed Lloyds and Barclays in providing a pay boost to staff to help them cope with the cost of living crisis. NatWest is to give more than 22,000 staff an average annual pay rise of around £1,000, with those earning less than £32,000 receiving an additional 4%. NatWest's chief executive, Alison Rose, said: "The continued rise in the cost of living is impacting people, families and businesses in the UK and across the world. Our focus is on working with our customers, colleagues and communities and providing proactive support to those who need it most. We are also aware that many of our customers and communities are feeling the strain, which is why we continue to develop our support for them, just as we did throughout the pandemic."
HSBC banker quits over provocative climate change speech
HSBC’s global head of responsible investing has resigned after being suspended by the bank for a speech in which he accused policymakers of overstating the financial risks of climate change. Stuart Kirk told an event in May that central bankers were attempting to “out-hyperbole the next guy” with their warnings about the threat to investors and banks of global warming. Kirk announced on LinkedIn on Thursday that he was quitting the bank, insisting there was “no place for virtue signalling in finance” and added: “If companies believe in diversity and speaking up, they need to walk the talk. A cancel culture destroys wealth and progress.” Mr Kirk also announced he had been gathering a "crack group of like-minded individuals" to deliver "what is arguably the greatest sustainable investment idea ever conceived". "I will continue to prod with a sharp stick the nonsense, hypocrisy, sloppy logic and group-think inside the mainstream bubble of sustainable finance," he said.
TSB joins Santander in boosting savings rates
TSB has become the latest high street bank to boost rates across a range of its savings products. The bank has increased its fixed rate bonds to as high as 2.5% and hiked its one-year fix rate Isa deal from 0.81 to 2%, its two-year deal will now pay 2.2% instead of 1%, while its three-year deal has risen from 1.1% to 2.5%. TSB's announcement follows Santander's move on Monday to also up rates across a range of fixed rate and easy-access products. James Blower, founder of the Savings Guru said: “These moves could be a sign that competitive pressures are driving them with savers responding to the market increases and shopping around. It will be interesting to see if it prompts some of the big four to follow suit and move too.”
PRIVATE EQUITY
SoftBank’s Rajeev Misra to launch $6bn fund backed by Abu Dhabi groups
The trader behind the rise of SoftBank’s $100bn Vision Fund, Rajeev Misra, is set to launch a new $6bn fund backed by Abu Dhabi state funds Mubadala and ADQ, as well as Royal Group, which is chaired by Sheikh Tahnoon, the brother of the UAE president Sheikh Mohammed bin Zayed. Mr. Misra will stay on in a reduced capacity at SoftBank, overseeing the original Vision Fund investments, while stepping back from oversight of its successor, Vision Fund 2. The announcement follows a string of departures at Softbank.
Private equity platform doubles assets under management
Moonfare has topped €2bn in assets under management as more everyday investors turn to the Berlin-based private equity company’s services.
INTERNATIONAL
EU watchdogs issue edicts on capital requirements
The European Central Bank's top supervisor Andrea Enria has asked eurozone lenders to revise their capital trajectories to factor in the risk of a recession when announcing distribution plans. Meanwhile, the European Banking Authority has been urging banks to remove more "legacy instruments" from their reserves to improve the quality of their core capital.
AVIATION
BA strike at Heathrow suspended after pay deal agreed
A dispute that threatened to cause a strike by British Airways check-in staff at Heathrow airport during the summer holidays has been suspended. Talks on Wednesday led to a package being agreed with the Unite and GMB unions that will effectively see the 10% pay cut introduced during the pandemic restored, sources said.
Jet2 warns UK airports are ‘woefully ill-prepared’
The boss of Jet2 airlines is considering suing airports for compensation after its chairman attacked them for being “woefully ill-prepared” and “poorly resourced” to cope with the rebound in air travel.
CONSTRUCTION
Persimmon blames labour and material costs for drop in completions
Persimmon said shortages of materials and labour contributed to a 10% drop in the number of homes built in the first half of the year. The company completed 6,652 homes in the first six months of 2022, down from 7,406 a year earlier. Further delays in the planning system also contributed to the fall in completions, the housebuilder said.
FINANCIAL SERVICES
Ashley Alder to be new FCA chair
The long-standing chief of Hong Kong's financial watchdog is set to become the next chairman of Britain's financial regulator. Ashley Alder, who has run the Securities and Futures Commission (SFC) since 2011, will take up the new role in January 2023, the SFC said in a statement Friday. Mr Alder will be tasked with overseeing post-Brexit regulatory reforms in the financial sector as well as steering the watchdog through a transformation process, which seeks to boost its digital capabilities.
L&G chief warns UK at risk of losing investment to US
The chief executive of L&G, Nigel Wilson, has voiced doubt over whether proposed changes to Solvency II rules go far enough to attract the post-Brexit investment boost ministers hope for. If reform is not radical enough insurers are likely to invest in non-UK assets, Wilson said. His comments come as L&G revealed a good start to 2022 with operating performance in line with expectations and deliver double-digit growth in cash and capital generation expected for the first half.
MEDIA & ENTERTAINMENT
Facebook threatened with European ban over GDPR breach
Irish regulators have provisionally ruled that Facebook can no longer send European users’ data to the US, arguing that the social media site’s current set up breaches EU data protection laws. The draft decision by Ireland’s Data Protection Commission will be challenged by Facebook parent Meta, experts said, and would not immediately lead to any actual ban of data transfers.
REAL ESTATE
House prices defy slump fears with 13% rise
House prices in Britain rose for the twelfth month in a row in June, defying expectations of a slowdown, according to figures from the Halifax. The pace of house price growth accelerated from 10.7% in May to 13% in June, meaning the average price of a property is now £294,845, Prices have risen by 6.8%, or £18,849, so far this year. "Property prices so far appear to have been largely insulated from the cost of living squeeze," Russell Galley, managing director at Halifax, said. "This is partly because, right now, the rise in the cost of living is being felt most by people on lower incomes, who are typically less active in buying and selling houses." In England, the South West recorded the largest increase in prices at 14.2%, where a typical home now costs £308,128. Prices of detached homes have risen almost twice as fast as the price of flats in a shift in demand towards bigger properties, jumping 13.9% and 7.6%, respectively, according to Halifax.
Greystar raises fresh funds as residential rental investment surges past €30bn
US group Greystar attracted €1.55bn from institutional investors this week for a fund targeting residential rental accommodation in Europe as property investors seek a hedge against rising interest rates.
RETAIL
Inflation hits retail sales
New figures reveal that total like-for-like sales increased by 8.4% last month compared with a year ago, the lowest rate since February last year as high inflation and the deepening cost of living crisis deter consumers.
ECONOMY
UK public finances on ‘unsustainable path’, says OBR
The Government's independent forecaster has warned that the UK’s public finances are “on an unsustainable path” unless spending is tightened and taxes are raised. The Office for Budget Responsibility (OBR) said soaring energy prices and pressures from an ageing population risked tipping the UK into a recession. In its projections, the watchdog showed public debt rising persistently above 100% of GDP by the middle of the century and climbing further after that to reach twice the level of GDP by the mid-2060s. The OBR said bringing debt back to pre-pandemic levels, around 75% of GDP, would require finding an extra £37bn every decade for the next 50 years, raised either through tax increases or spending cuts.
Mann urges faster rate rises
Bank of England policymaker Catherine Mann has called for faster interest rate rises to combat inflation, even if it means Threadneedle Street has to reverse course later. The former Citi economist, who has unsuccessfully backed half-point increases three times this year, said: "I think history will be kind if there is a future policy reversal."