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Daily News Roundup: Thursday, 17th September 2020

Posted: 17th September 2020

BANKING

Big bank rates fail to match inflation

Analysis shows that while there are more than 600 bank accounts available offering inflation-matching savings rates, fewer than a dozen of these are offered by Britain's biggest banks. With August's consumer prices index coming in at 0.2%, the lowest level in five years, there are 661 inflation-matching accounts available to UK savers. Of these, just eleven are offered by Barclays, HSBC, Lloyds, Nationwide Building Society, NatWest, Santander and TSB. Of 87 easy-access savings accounts currently paying at least 0.2%, just one is offered by one of Britain's biggest high street banks. Nationwide's Triple Access Online saver has a rate of 0.25%, while the top rate of 1.2% is offered by Skipton Building Society. Barclays, HSBC and Nationwide all offer a one-year fixed-rate bond paying 0.3%, this compares to the 1.25% top rate savers can earn with Secure Trust Bank.

Newcomer bank Allica speeds up fundraising

Allica Bank has received a £26m investment from majority shareholder Warwick Capital Partners and is in talks to raise a further £100m via a fundraising later this year or in early 2021.

HSBC offers switch bonus

HSBC is offering new customers a cash payment of £125 should they switch to the Advance Bank Account or the Premier Bank Account. This is the biggest switch bonus currently being offered, with rewards from Lloyds and Royal Bank of Scotland the next best at £100.

PRIVATE EQUITY

KKR raises over $11bn in Asia fund

KKR has raised over $11bn after the first-close of its fourth Asia-focused fund. It started marketing the fund towards the end of last year, targeting $12.5bn in what would be the region's biggest private equity fund.

INTERNATIONAL

Handelsbanken cuts jobs and branches

Handelsbanken is to close almost half of its branch network and cut about 1,000 jobs in Sweden over the next two years. The firm said savings will be directed to investment in IT systems. The bank says the cuts and closures will lower costs by about 1.7bn Swedish crowns compared with 2019, to around 20bn crowns by the end of 2022. It added that investment in IT and digital services over the next two years is set to come in at around 1bn crowns.

AVIATION

Report released on 737 MAX failures

A report released from the House Transportation and Infrastructure Committee in the US says two fatal crashes involving Boeing’s 737 Max, which led to the worldwide grounding of the aircraft, were caused by engineering flaws, mismanagement and a lack of federal oversight. The Federal Aviation Authority is believed to be close to rescinding a grounding order for the plane. With aviation authorities elsewhere possibly following suit, the aircraft could be airborne again this winter.

CONSTRUCTION

Redrow profit slips 65%

Housebuilder Redrow’s pre-tax profits fell by 65.5% to £140m over the year to June, with revenues down 37% to £1.34bn as the impact of the coronavirus crisis hit construction and sales. It said a decision to pull out of the London property market and wind down its operations in the capital is costing it £35m. The firm says an order book of £1.42bn marks a 39% increase on the same period last year, while reservations for the first 11 weeks of the new financial year increased by 12%.

FINANCIAL SERVICES

Woolard to lead credit market review before FCA exit

The Financial Conduct Authority (FCA) has announced that interim chief executive Christopher Woolard is to leave the watchdog next year, but will first chair a review into lending practices in the unsecured credit market. The FCA said the review will “take into account the impact of the coronavirus on employment security and credit scores, changes in business models and new developments in unsecured lending including the growth of unregulated products in retail and the workplace”. Mr Woolard, who will stand down as interim CEO next month, will be supported by an advisory group and make recommendations to the watchdog early next year.

Retail trading ‘entering new era’

Brendan Callan, global CEO of FXCM, writes in City AM, on how “Modern technology has made retail trading accessible to all,” suggesting that costs have reduced “so substantially” that the idea of ‘free’ trading is now entering the mainstream. He notes that FXCM is working with Interactive Brokers to utilise the latter’s best-in-class technology for launching FXCM Stocks.

Luxembourg’s older investors turn to robo advisers

The FT reports that the coronavirus pandemic is putting pressure on the financial services industry in Luxembourg to step up efforts to move into digital technology.

LEISURE AND HOSPITALITY

Tui refunds secured for passengers

Tui has promised to clear a backlog of refunds by the end of the month following an investigation by the Competition and Markets Authority (CMA). The CMA had received thousands of complaints from customers waiting many weeks for their money back, despite the fact that refunds for cancelled package holidays should be completed within 14 days. Following the probe, Tui said it would clear outstanding refunds by 30 September.

Byron mulling GBK bid

Gourmet Burger Kitchen owner Famous Brands is looking to offload the chain and indicated it will no longer provide funding to the restaurant operator. Calverton UK, owner of rival burger chain Byron, is said to be considering a bid.

MEDIA AND ENTERTAINMENT

News websites in UK see readership grow since 2019

Audience measurement body Pamco has revealed that the number of daily readers at UK national news websites reached 22m in June, increasing by 3.7m year on year. Jo Allan, managing director at industry body Newsworks, commented: “Across the total news sector we reach 49m people every month and 38m people a day, and with strong growth across our digital audiences we continue to see demand for high quality journalism.” Comscore digital data for the month showed that the Sun was the most-read online news brand, with the Mail in second place.

REAL ESTATE

House prices up 3.4% in June

Land Registry and Office for National Statistics figures reveal that average UK house prices increased by 3.4% in the year to June 2020. This compares to a 1.1% year-on-year increase recorded in May. The price increase recorded in June took the average house price to £238,000. England led the way on price increases, with values up by 3.5% over the year, with a 4.2% climb recorded in London. Month-on-month, prices climbed 2.7% in June. Meanwhile, HMRC data shows that property transactions in England increased by 28% between May and June, although year-on-year transactions were down 37%.

RETAIL

Aspinal closes boutiques

Handbag brand Aspinal of London has launched a CVA that will see it close its ten boutiques, with the firm struggling amid a decline in shoppers during the coronavirus pandemic.

SPORT

FIFA estimates football’s losses

An estimate from the sport’s governing body FIFA suggests that football around the world will miss out on some £11bn in revenue as a result of the coronavirus pandemic. FIFA has a $1.5bn COVID relief fund in place, with national associations able to apply for a grant of $1m, with an additional $500,000 ring-fenced for women's football.

ECONOMY

Inflation hits 5-year low in August

Inflation fell to 0.2% in August, from 1% in July, with last month’s gauge of the cost of goods and services revealing that prices rose at their slowest rate in five years. The Government’s Eat Out to Help Out scheme contributed to the dip, with the initiative designed to encourage people to dine out seeing prices in restaurants and cafes down 2.6% year-on-year. The Office for National Statistics said this marked the first time the prices had been negative since records began in 1989. A temporary cut in VAT also contributed to a decline in prices, with the reduction on the levy from 20% to 5% for food, non-alcoholic drinks, accommodation and admission to attractions in place until mid-January 2021. Thomas Pugh, UK economist at Capital Economics, said that while August's figure was probably "the low point" for inflation, it is unlikely to hit the Bank of England's 2% target within the next few years.

OTHER

Card spending falls

UK Finance figures show that credit and debit card transactions dipped in June, with the 933m transactions recorded in the month marking a 2.7% decline compared to May and a 43.1% dip on June 2019. While more of the high street was open in June following the lockdown, many shoppers opted to make purchases online, with 23% of card transactions in June made through the web – up from 14% a year ago.

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