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Daily News Roundup: Thursday, 18th November 2021

Posted: 18th November 2021

BANKING

Barclays investors flag concern over Staley's exit deal

The Investor Forum has received complaints over Barclays’ handling of chief executive Jes Staley's exit, with it reported that a number of the bank's top 20 shareholders have raised concerns over the departed CEO's pay award. Mr Staley has left the bank to contest the findings of a Financial Conduct Authority and Prudential Regulation Authority probe into whether he inaccurately described his relationship with disgraced financier Jeffrey Epstein. His contract entitles him to receive his current fixed annual pay of £2.4m in cash and a pension allowance of £120,000 until October 31 next year. The Investor Forum, which lobbies on behalf of big investment managers including Blackrock, Aviva Investors, Fidelity, Schroders and JO Hambro, said it has received complaints, centred on Mr Staley's pay, pension and repatriation costs.

Revolut investor Balderton plots stake sale

Venture capital investor Balderton Capital, one of the earliest investors in Revolut, is looking to sell at least part of its holding in the digital bank, with UBS reportedly having been appointed to oversee the sale. Revolut became Britain's most valuable ever start-up when a funding round in July led by SoftBank's Vision Fund II and US hedge fund Tiger Global gave it a valuation of £24.5bn. Balderton has backed the company since 2015, when it invested in a £1.5m seed round.

INTERNATIONAL

Goldman CEO: Travel curbs impact staff

Goldman Sachs CEO David Solomon has warned that staff face challenges as Hong Kong and China are unlikely to ease their tight travel restrictions anytime soon. He said many of Goldman's staff in the region have passports from other countries and have been caught up in the travel restrictions, saying this is “not a great dynamic for talent”. This comes just days after JPMorgan CEO Jamie Dimon said he believed Hong Kong's strict pandemic measures are making it tougher for the investment bank to retain staff in the financial hub.

AVIATION

Flybe set to return

Airline Flybe, which collapsed in March last year amid the impact of the pandemic, is to start flying from Birmingham airport in spring next year. The Flybe brand was acquired from the administrators in October last year by hedge fund manager Lucien Farrell and his Cyrus Capital hedge fund. Flybe said that it would “serve key regions across the UK and EU” but has yet to identify routes or give any indication of its fare-pricing plans.

FINANCIAL SERVICES

Numis reports itself after retracting memo about THG 'irregularities'

Investment bank Numis has retracted allegations about "irregularities in accounting" at online retailer THG - a company it helped to float on the London Stock Exchange. Numis has reported itself to the Financial Conduct Authority (FCA) after an employee circulated a note to institutional clients accusing THG of "a lack of clarity" and casting doubt on the value of its Ingenuity division. A follow-up was sent out alluding to "misrepresentations”, with the amended version removing a reference to "irregularities in accounting". A third note to Numis clients apologised for "some inaccuracies” and for any confusion caused.

State-backed venture capital group takes stakes in UK start-ups

British Patient Capital, the venture capital arm of the state-owned British Business Bank which has a £2.5bn budget, has acquired its first direct stakes in a range of UK start-ups.

Savers hunt for missing pensions

More than 200,000 people have contacted the Government to ask for help locating their missing pensions. A freedom of information request to the Department for Work and Pensions, submitted by Hargreaves Lansdown, showed that almost 207,000 calls have been made to the government’s pension tracing service over the past four years.

REAL ESTATE

House prices climb to record high

The average house price has hit a record high of £269,945, with figures from the Office for National Statistics (ONS) showing £28,000 has been added to the typical property price over the past year. Values increased by 11.8% over the year to September, with this up on the 10.2% annual growth recorded in August. Wales has seen the steepest climb, with the average price up 15.4% over the year, while Scotland added 12.3%, England saw a 11.5% increase and prices in Northern Ireland rose 10.7%. Regionally, North West England led the way, with values up 16.8% in the year to September, while London saw the lowest growth, at 2.8%. On a month-by-month basis, UK house prices climbed 2.5% between August and September.

British Land bounces back

British Land has reported that it is back in profit, suggesting that warnings about ‘the death of the office’ might be exaggerated. The commercial property firm collected 100% of office rents and saw the busiest period for leasing workplaces in a decade as businesses felt they could finally start making concrete plans for their future. British Land also reported that its net asset value per share had risen by 5.1% to 681p in the six months to the end of September. The landlord bought retail parks worth nearly £300m during this time.

RETAIL

Amazon to stop accepting UK-issued Visa cards

Amazon has announced that it will stop accepting payments made with Visa credit cards issued in the UK from January 19 next year. The e-commerce giant blamed the move on "the high fees Visa charges for processing credit card transactions." The retailer will continue to accept Visa debit cards and other credit cards, including Mastercard, which supplies the retailer's branded credit card, and American Express. Meanwhile, the British Retail Consortium said companies faced an estimated £150m rise in the cost of accepting cross-border card payments, with British retailers shouldering an extra £36.5m in fees, equivalent to £100,000 every day.

Frasers Group to leave Oxford Street

Frasers Group has announced that its House of Fraser department store on London's Oxford Street will close in January after its landlord served notice. The building's owners, Public Properties Establishment, has secured permission for a £100m redevelopment of the site. Jace Tyrrell, CEO of London business group New West End, said that the House of Fraser site redevelopment was part of a necessary reinvention of Oxford Street.

ECONOMY

Inflation surges to highest rate in ten years

Data from the Office for National Statistics shows that inflation has surged at its fastest pace in almost 10 years, hitting 4.2% in the year to October. The rate, which is the highest since November 2011, is far higher than the 3.1% rise recorded in the year to September and more than double the Bank of England's target of 2%. The increase in Consumer Prices Index inflation was driven by a sharp increase in gas and electricity prices and can also be attributed in part to an increase in hospitality prices following the partial removal of a VAT cut for the sector. The increase comes just days after Bank of England governor Andrew Bailey told MPs that he was “very uneasy” about rising inflation, with the jump to 4.2% adding to pressure on the Bank to raise its key interest rate. The Institute of Directors’ chief economist, Kitty Ussher, has urged the Bank to act and “show it means business and get inflation expectations back in line with their mandate.” Reflecting on the figures, Chancellor Rishi Sunak said: "Many countries are experiencing higher inflation as we recover from Covid, and we know people are facing pressures with the cost of living." Meanwhile, Labour says households will be left more than £1,000 worse off next year due to higher levels of inflation. Shadow Chancellor Rachel Reeves accused the Government of “looking the other way” instead of taking action, saying ministers are “blaming ‘global problems’ while they trap us in a high tax, low growth cycle”. 

OTHER

HMRC faces challenge amid £42bn tax payment backlog

The tax office may struggle to recoup a vast backlog of payments that has accrued during the pandemic as HMRC does not have enough staff and budget cuts to its collection department have resulted in an increasing number of debts being written off. Analysis by the National Audit Office (NAO) shows that tax debts increased by £26bn between January 2020 and September of this year, with the debt pile currently standing at £42bn. The backlog in payments - which comes after HMRC paused collections and focused on supporting struggling businesses during the coronavirus crisis - is on top of the estimated £6bn of public money already lost to fraud via various pandemic-related support schemes. Gareth Davies, head of the NAO, said it would be years before HMRC was able to recover money owed to taxpayers, warning that the tax authority “faces several years of managing a far greater level of debt than it has been used to.” “HMRC needs to significantly increase its capacity if it is to meet the changed scale and nature of the challenge,” he added.

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