BANKING
Open banking revolution raises fraud concerns
Ali Hussain in the Sunday Times outlines how open banking will increase competition in the financial services sector amid fears the new system, driven by the Competition and Markets Authority, will leave consumers vulnerable to online fraud. From Saturday, high street banks will be able to share customer data so third parties can assess whether consumers are getting the best deals. These third parties will have to be registered with, and regulated by, the Financial Conduct Authority or another European regulator, Mr Hussain explains, but experts fear protections against fraudsters may not be sufficient. Meanwhile, the consumer group Which? said it expected the change to result in a higher instance of “push payment” scams, where fraudsters hack into someone's account, or trick them into transferring life-changing amounts of money to a criminal's bank account. Get Safe Online, an internet security group, has also sounded the alarm over a rise in the number of unscrupulous firms pretending to be involved in Open Banking in order to steal details.
Goldman Sachs not looking to move jobs
Lord O'Neill, the former chief economist of Goldman Sachs, has played down concerns that the Wall Street bank could move thousands of staff from London as a result of Brexit. He said that while Brexit would not be good for the City, he was not predicting a significant exodus of jobs. “That idea that Lloyd 'Blankfein, chief executive of Goldman Sachs' is going to take 6,000 Goldman people and put them in Frankfurt or anywhere else ... is just not going to happen soon. The big, truly international guys, like my ex-shop, they won't go rushing to move a lot of people at first,” he added.
Credit Suisse plans to close office
Credit Suisse plans to move staff out of one of its buildings in London's Canary Wharf as it consolidates its property portfolio after cutting jobs and costs. Switzerland's second-biggest bank has cut thousands of jobs while increasing its focus on wealth management and scaling back investment banking.
1,000 euro millionaires in banks’ City pay surge
The London arms of American banks paid almost a thousand staff more than €1m (£900,000) each in 2016. Ten employees at Goldman Sachs' European operation, headquartered in London, each received more than €9m. JP Morgan paid 14 members of its London-headquartered business more than €5m each. Meanwhile, Morgan Stanley paid five members of staff more than €7m each, while Bank of America paid seven employees more than €5m apiece.
Blackhurst: Banks are making a mockery of reforming financial services
Chris Blackhurst argues in the Independent that big banks are making a mockery of attempts to reform financial services. He says they are using Mifid II to price out the smaller players who do not have their vast resources, adding that a rethink is needed before investors suffer.
Gandhi to head Barclays broking
Barclays has appointed Kunal Gandhi as head of corporate broking and Rob Mayhew as his deputy, according to an internal memo.
PRIVATE EQUITY
Lintbells sells stake
Lintbells, the maker of pet nutrition used by around half the dogs at Crufts, has sold a stake to Inflexion Private Equity. The firm is looking to expand overseas.
Boost for KKR as it offloads Valinge stake
KKR has offloaded its stake in Swedish flooring company Valinge to the Kristiansen family, the Danish owners of Lego.
INTERNATIONAL
Deutsche Bank to take €1.5bn US tax hit
Deutsche Bank will take a €1.5bn (£1.3bn) charge following changes to the US tax code, meaning it will not make a profit for 2017. As well as Deutsche, Morgan Stanley said it expected the changes in its deferred tax assets to lead to a $1.25bn hit.
Wells Fargo trails its peers as a legacy of scandal persists
Wells Fargo is set to miss out on a record-breaking year for profits at big US retail banks, as the company continues to cope with the effects of the bogus accounts scandal that emerged nearly 18 months ago.
Big German banks muscle in on retail
The FT’s Olaf Storbeck examines how Deutsche Bank and Commerzbank are looking to win business from struggling German savings banks and co-operatives.
AUTOMOTIVE
Volkswagen on track to remain top car maker
Internal sales estimates from VW Group - which includes the Audi, SEAT and Porsche marques - predict global sales of 10.7m vehicles for last year. This would put VW comfortably ahead of Toyota’s worldwide sales forecast for 10.35m vehicles in 2017.
AVIATION
Fuel costs taking a toll on airlines
The Telegraph gathers opinion from executives in the airline industry who feel that the rising oil price, alongside pressures related to Brexit and competition for key staff, could lead to more turmoil following the failures of Alitalia, Air Berlin and Monarch. Wizz Air chief executive József Váradi believes more expensive oil helped “clean out the market”, but there remain a “number of airlines hanging on which should not be in business”.
Airbus woos China with A380 industrial partnership offer
Airbus is in talks to sell 100 or more aircraft to China Aircraft Leasing Group. Airbus is also proposing to increase production at its Tianjin final assembly line.
CONSTRUCTION
Construction nears five-year low
Official figures out this week are set to show that the construction industry is heading for its sharpest annual decline in output in nearly five years. Economists are forecasting a 0.9% contraction, the worst since May 2013. The picture is more upbeat for manufacturing, which is expected to show continued growth in this week’s numbers from the ONS.
Berkeley bosses in line for £127m
Top bosses at Berkeley Group stand to make a total of £127m in bonuses between now and 2023 despite the housebuilder putting a cap on its controversial incentive scheme after protests by investors. The bonus scheme was put in place during 2011 and has paid out £92m since, with Berkeley halving the maximum amounts that could be paid after the protests.
FINANCIAL SERVICES
Charles Randell to be new chairman of FCA
Charles Randell has been appointed chairman of the Financial Conduct Authority. The lawyer, who is currently on the board of the Bank of England’s Prudential Regulation Authority, will succeed John Griffith-Jones on 1 April. Mr Randell advised ministers at the height of the 2008 financial crisis and joins the FCA at another key juncture as the City navigates Brexit.
Brussels freezes out UK start-ups
The Sunday Times reveals that the InnovFin SME guarantee, which encourages lenders to finance high-risk companies by guaranteeing to cover some of the losses if a loan defaults, is no longer providing funds to UK start-ups. Since its launch four years ago, the fund has committed more than €70m (£62m) to Britain. It could confirm fears European funding will dry up after years of big investment.
Samuel: If EU refuses a deal, we should abandon its regulatory nonsense
Juliet Samuel argues in the Telegraph that if the EU refuses to negotiate a sensible deal on regulatory cooperation and market access for our financial sector, the UK should abandon its regulatory nonsense – pointing in particular towards MifiD II. She says it would be better to cooperate with the EU on regulation than lose market access. But if market access is taken off the table, then all bets are off.
HEALTHCARE
NHS pays £1bn to rehire staff
Thousands of NHS staff are being rehired after being made redundant at a cost of over a billion pounds. Figures obtained by shadow health secretary Jonathan Ashworth through a parliamentary question show 33,494 workers were laid off since 2010-11 with £1.2bn in pay-offs, of whom 8,854 were re-employed.
LEISURE AND HOSPITALITY
Aspall cider sold to Molson Coors
Aspall, the cider brand founded in Suffolk in 1728, has been sold to Molson Coors, the US beer company that owns brands including Carling and Miller. Molson Coors said it wanted to make Aspall the UK's top-selling premium cider and build on the potential of its vinegars.
MANUFACTURING
UK factories optimistic for 2018
A survey from the EEF has found that Britain’s manufacturers are more upbeat about the state of the global economy than at any time since 2014 and believe demand from overseas will sustain their businesses through another year of Brexit uncertainty. The poll found that 40% of the companies questioned were planning for growth in 2018 while 19% were expecting a downturn in their business.
MEDIA AND ENTERTAINMENT
Uber sued for £14m media bill
Fetch Media is suing Uber over $19m (£14m) in unpaid bills. The British advertising agency has been at odds with Uber since last January, when it says the San Francisco-based ride-hailing company stopped paying its bills.
REAL ESTATE
Upmarket homes face biggest squeeze
Prices of upmarket homes are falling as rising property taxes and uncertainty over the economy force sellers to make reductions, according to research for the Times. Almost half of the homes on sale for between £1m and £2m in London have had their prices cut, with average reductions of £142,000. The figures by Lonres, the property data analyst, show that across Britain a third of sellers reduced their asking price last year, the highest proportion since 2012.
RETAIL
House of Fraser aims to cut store rents
House of Fraser has confirmed that it is seeking to reduce rents on some of its stores, in a move which the BBC suggests shows it could be struggling after a tough Christmas for retailers. The Mail goes a step further and questions whether the move shows that House of Fraser is on the brink of collapse. The retailer confirmed that it had written to some landlords asking for their “support”.
Credit insurers act at New Look
The Sunday Times reports that leading credit insurers, including Euler Hermes, are understood to have stopped offering cover on new shipments of goods to New Look, although they are reported to still be providing “residual” cover to their clients for existing orders. QBE, another insurer, is thought to have reduced its level of cover, but not to have withdrawn altogether.
ECONOMY
Workers expect low wage growth
A study by Bank of America Merrill Lynch reveals that UK workers are more pessimistic about wage growth than economists at the Bank of England thought. British workers expect pay growth to fall from 2.7% in 2017 to 2.4% this year, contradicting forecasts from the Bank which predicted pay growth as a result of record low unemployment. Rob Wood at BAML said: “There has to come a point where unemployment gets low enough that you do get stronger wage growth, but given what we’ve seen in past few years I am not holding out much hope it is going to happen in 2018.”
UK productivity grows at quickest pace in six years
Figures from the ONS show a welcome rise in UK productivity as Britain languishes fifth in the rankings of G7 countries for output per hour worked. Output increased by 0.9% compared to the previous quarter - the biggest increase since the second quarter of 2011, when productivity grew by 1%. However, if productivity growth had followed its pre-financial crisis trend, then output per hour worked would be around 20% higher today.
OTHER
VAT burden to grow after Brexit
Legislation to be considered by MPs today could see over 130,000 UK firms forced to pay VAT upfront for the first time on all goods imported from the EU after Brexit. Nicky Morgan, the Tory chair of the all-party Treasury select committee, said the committee would launch an urgent investigation into the changes made by the taxation (cross-border trade) bill. Ms Morgan said she would be writing to HMRC to determine what contingency plans were being put in place to avoid pain for UK firms.
Global debt reaches an all-time high
A report from the Institute of International Finance reveals that global debt hit an all-time high of $233trn (£169trn) in the third quarter of 2017 – a $16trn increase on 2016.