Skip to Content
Skip to Main Menu

Daily News Roundup: Thursday, 11th August 2022

Posted: 11th August 2022


High Street lenders stop accepting new customers

Soaring demand from borrowers to secure mortgage deals amid fears over rising rate has led high street banks to suspended their offers on new applications. Coventry Building Society, Cambridge Building Society, Saffron Building Society, and Suffolk Building Society have all put halt to new business. Ray Boulger, technical director at broker John Charcol, said: "Lenders with the most competitive deals are receiving more applications than they can cope with and so they have two choices: increase their rates to reduce applications, or temporarily withdraw from the market." David Hollingworth, director at mortgage broker London & Country, added: "We have seen this before and it's usually temporary, usually only lasting a few days. Lenders are having to take practical decisions so they can get their service back on track - it's a by-product of the frequent and rapid changes in the market that we are seeing at the moment. Each time base rate moves, lenders have to reprice and they get a new wave of business as everyone tries to grab a deal before it goes."

Treasury cancels appointment of woke former mandarin

Dame Clare Moriarty, a former permanent secretary of the environment ministry and now chief executive of Citizens Advice, has been removed from a list of potential appointees to the Bank of England following a backlash over her lack of economic experience and focus on “agitating for diversity, inclusion and change”. Dame Clare had been selected by Chancellor Nadhim Zahawi after having been lined up by the Treasury during Rishi Sunak’s time as chancellor. But the Treasury made a U-turn after Tory MPs complained that the mooted appointment showed Threadneedle Street was appointing people based on their adherence to certain ideologies rather than their abilities. The Chancellor has now signed off four new members of the Court of the Bank of England: former investment banker Lord Jitesh Gadhia; Sabine Chalmers, a senior lawyer at BT; Soumen Das, finance chief at property group Segro; and Tom Shropshire, company secretary at drinks maker Diageo.

Lloyds branch closure will hit 'elderly and vulnerable'

The closure of a branch of Lloyds Bank in Sheffield will hit the "elderly and most vulnerable", councillors have said. The lender plans to shut its branch on City Road in November, followed by a further bank in the city centre a week later. Ben Miskell, a councillor for Sheffield's Park and Arbourthorne ward, told the Local Democracy Reporting Service: "We've been inundated by concerned residents who want Lloyds to reconsider their closure plans. Closing bank branches in deprived communities is not a responsible action to be taking and leaves some of the most vulnerable residents, as well as local businesses, without proper access to banking services."


SoftBank to book $34bn gain from selling Alibaba shares

Softbank announced in a filing on Wednesday that it would reduce its stake in Alibaba from 23.7% to 14.6% in a move that will realise a $34.1bn gain for the Japanese investment company. The news comes just days after SoftBank had reported a $50 billion loss at its Vision Fund investment unit in the first half of the year. The transaction "will be able to eliminate concerns about future cash outflows, and furthermore, reduce costs associated with these prepaid forward contracts," SoftBank said.


ABN Amro’s Q2 net profit jumps 21%

ABN Amro beat analyst expectations on Wednesday with a jump of 21% in second-quarter net profit to €475m. The Dutch bank’s earnings were lifted by an economic recovery in the Netherlands, which stimulated demand for corporate and mortgage loans and improved the credit quality of existing clients.


Tui suffers £63m hit from recent travel chaos

Disruption at airports following the resurgence in travel after the pandemic set holiday group Tui back €75m (£63m). The company said its customers were affected by about 200 cancelled flights in May and June, particularly due to problems at Manchester Airport. However, the quarterly results were still a big improvement on the €669.8m (£566m) underlying loss seen at the same point last year.


Housebuilding makes 'solid return'

UK housebuilding activity has returned to pre-pandemic levels, according to an industry body. Some 40,289 new homes were completed in Q2, 16% higher than the same period in 2021, the National House Building Council (NHBC) said. It was the highest quarterly figure since 42,354 completions were recorded in the fourth quarter of 2019. Growth in new home completions in the second quarter was driven by the private sector, where completions were up by 23%, while completions in the affordable and build-to-rent sectors were level, the NHBC said.

Bellway boasts record £3.5bn revenue

Bellway has posted a record annual housing revenue of £3.5bn. The figure has grown by more than £1bn since 2020, and some £400m since last year. Despite increasing operational costs, Bellway’s housing completions jumped by 10.5% in the year to 31 July, to another record of 11,198 homes.


City urged to hire more working class managers

A UK Government-sponsored report has said the UK’s finance industry should set "stretching targets" for appointing people from working class backgrounds to senior positions. A taskforce commissioned by the Government and led by the City of London Corporation said that 49% of all levels of seniority in the finance industry were from a professional background, rising to 64% for senior leaders. For the UK population as a whole, 37% of working people are from a professional background. The survey also found white men from a professional background account for 45% of senior roles, compared with 23% for their female counterparts while just 13% of senior roles are filled by white men from working class families. "This data provides a robust baseline by which the sector can begin to track its progress on socio-economic diversity and address gaps," said Catherine McGuinness, who chaired the taskforce. "We urge firms to collect data, set stretching targets and ensure they provide a level playing field for all."

Aviva promises share buyback after boost from rising interest rates

Aviva announced on Wednesday that it plans to hand back more cash to shareholders with analysts at Citigroup estimating that the company could buy back £250m to £300m of shares. The move comes barely two months after the FTSE 100 insurer returned £4.75bn to investors and accompanied news of better than expected first-half profits. Aviva saw operating profits increase by 14% over the first half, to £829m. Elsewhere, UK motor insurer Admiral posted pre-tax profits of £251m for the first half of 2022, down from £482m in the same period last year. The company’s CEO Milena Mondini de Focatiis admitted that prices had to be hiked by about 16% to counter claims inflation of 11% in the first half. Barclays analysts said Admiral had “weathered” the challenging first half of the year well highlighting strong customer growth.

Record skills shortfall in UK finance

The UK’s finance industry is seeing its worst job vacancy rates on record. The sector had more than five vacancies unfilled for every 100 jobs between April and June 2022, the highest since records began in 2001, according to data compiled by the Office for National Statistics. The skills shortage has been caused by digitization in banking, investing and insurance and more firms requiring employees to have new skills, and is compounded by people leaving employment during the pandemic, Claire Tunley, CEO of the Financial Services Skills Commission (FSSC), said. The shortage of talent is causing employers to shift to a “reskilling approach,” and some firms have started training their staff in new areas such as machine learning and automation, Tunley said. “We can’t wait for schools to do this - it’s here and now.”

UK fire and subsidence claims will rise due to extreme heat, says LV=

LV= General Insurance has warned over the impact of record temperatures on claims, saying the climate crisis was already resulting in a rise in fire and subsidence cases this year. The insurer said it was dealing with claims worth £1.2m after the extreme heat that hit the country between 17 and 20 July. “We’re really starting to see the effects of climate change and the impact this is having on homes – whether that be storm, flood, fire or subsidence claims – which have all risen in recent years depending on the season,” Sarah Smith, the head of home underwriting at LV= GI, said.


Deliveroo’s pre-tax losses widen as consumers cut back on takeaways

The London-based food delivery app Deliveroo saw its pre-tax losses widen to £147m in the first half of the year as consumers hit by cost of living pressures ordered fewer drinks and side dishes.


Disney to launch ad funded version of streaming service

Disney added 14.4m customers to its Disney+ service in the quarter ending on July 2, taking total sign-ups to 221m. This is up on the 7.9m who joined in the second quarter and far above the 10m new subscribers Wall Street analysts had forecast. Disney also said it would launch a new ad funded version of its service, competing with a similar offering in the works from rival Netflix, and announced price rises. The entertainment giant posted a 26pc jump in group revenue to $21.5bn in the second quarter, with profits doubling to $2.1bn.


Profits at Ashley's investment vehicle fall

Mike Ashley's investment vehicle Mash Holdings has revealed that profits before tax fell to £99.7m from £199.6m in the year to April last year, after revenue dropped by about 8% to £3.8bn, including a 8.4% fall at Frasers.


Pill says rate hikes won't feed through until late 2023

Bank of England chief economist Huw Pill said on Wednesday that the full impact of higher interest rates would only be felt in late 2023 he rebuffed criticism that the BoE was too slow to act in response to surging inflation. "The trouble is what we've done is only going to have an effect at the end of 2023," Pill told an online audience at an event hosted by the BoE. With markets pricing in a high chance that the BoE will cut rates next year to fight a recession, Pill said quantitative easing (QE) was unlikely to feature in future stimulus. "I don't really foresee that for the next few years at least," Pill said. Separately, Morgan Stanley economist Bruna Skarica says in a piece for the FT that criticism of the Bank of England is largely misplaced as the central bank “was dealt a particularly bad macroeconomic hand to play.”

Close Menu