Revolut advances up to half of monthly wage
A service from Revolut will enable workers to draw out as much as half of their salary weeks before payday, with the bank to work with employers to grant customers access to their cash as they earn it. The digital bank will charge a flat fee of £1.50 every time a user accesses the pay they have accrued throughout the month, up to a limit of 50% earned the day after each new pay cycle begins. Revolut says the initiative will help alleviate the financial pressure some consumers see between paydays. As salary-on-demand schemes require a partnership with employers, Revolut is in talks with several businesses. It also confirmed that it would issue warnings to customers thought to be overusing the wage access service. Nik Storonsky, the digital bank's chief executive and co-founder, said: “After the difficulties of the past year, the last thing employees need now is financial uncertainty. It is important to move away from a situation where many are dependent on payday loans and expensive short-term credit — a reliance exacerbated by the monthly pay cycle.”
HSBC: China opportunities ‘too big to ignore’
HSBC chairman Mark Tucker has said that its business opportunities in China are “too big to ignore”, vowing to continue a shift towards Asia, where the lender is increasingly focused. This comes after the bank last year drew criticism when it backed a controversial security law allowing the Chinese state to imprison pro-democracy protestors in Hong Kong. Speaking to an audience in Hong Kong, Mr Tucker said: “I have great confidence in Hong Kong and its future. We are fully aware of the challenges and will continue our pivot to Asia.”
UK to probe private equity purchase of Ultra
Business Secretary Kwasi Kwarteng has asked the Competition and Markets Authority to investigate possible national security risks from the planned £2.6bn acquisition of defence firm Ultra Electronics by rival Cobham, which is owned by US private equity firm Advent. Mr Kwarteng said he would seek to stop Ultra from disclosing sensitive information to Cobham about the goods or services it provides to Britain's Government and its armed forces.
TD Bank fails to end credit card class action
A judge in the US has rejected a request by Toronto-Dominion Bank to dismiss a proposed class action brought by customers who said it had failed to honour an agreement to give them regular credit cards. Customers who obtained credit cards secured by deposits have accused the bank of reneging on its promise to let them automatically "graduate" to unsecured cards if they avoided defaulting on payments for seven months. The plaintiffs are seeking damages of at least $5m, claiming TD refused to give them unsecured credit cards even after they had gone for up to 37 months without defaulting.
Persimmon builds profit amid booming housing market
Persimmon has recorded a 64% rise in pre-tax profit for the first half of the year. The housebuilder completed 7,406 home sales at an average price of £236,199 in the six months to the end of June. In the same period last year, which was disrupted by a temporary shutdown of the housing market, it completed the sale of 4,900 homes for an average price of £225,066. Profit before tax rose to £480.1m, from £292.4m a year earlier. However, it remained below the £509.3m reported in 2019, when the housebuilder sold 7,584 for an average price of £216,942.
Balfour Beatty posts loss for UK construction business
Balfour Beatty has posted a £23m half-year loss in its UK construction business. However, the firm received a boost from its rail, road and energy maintenance interests which together booked profits of £54m in the first six months of the year, five times more than in the first half of 2020.
Brexit boosts EU’s wealthy banker headcount
A survey by the European Banking Authority (EBA) suggests that almost 100 high-earning bankers left the UK ahead of its formal exit from the EU. The annual poll of bankers earning more than €1m shows that the UK saw its number of high earners decline by 95 in 2019. Despite these bankers opting to leave for the continent, the UK still accounts for 71% of the 4,963 bankers in the top pay category in Europe. Analysis shows that by the time the UK formally left the EU at the end of December 2020, banks and other financial firms had relocated over 7,000 staff from London to new or expanded hubs in the bloc to ensure customers retained full access to the EU financial market. The report says these moves boosted the number of top earners in Germany to 492 from 450, while in France the total rose to 270 from 234 in France and Italy saw its headcount climb to 241 from 206. The EBA said: “The increase of high earners resulted mostly from the impact of the relocation of staff from the UK to EU27 as part of Brexit preparations”.
SoftBank exits to fund Vision Fund dealmaking
SoftBank sold an estimated $14bn worth of listed stocks in the last quarter, according to estimates based on the group’s quarterly reports and the average share price of each stock during the period, marking a change in its exit-hesitant strategy in order to fund its Vision Fund’s accelerating investments in tech start-ups. In the last quarter, the Japanese investment group ramped up dealmaking through its Vision Fund investment arm at a considerable pace, injecting $15bn into at least 50 start-ups.
N4 Partners appoints former Tesco Bank CEO as chair
Investment firm N4 Partners has appointed former Tesco Bank CEO Benny Higgins as chairman. Mr Higgins, who takes up the role from the start of next month, was chief executive of Tesco Bank for ten years, and prior to that was head of RBS and NatWest's retail banking business, which included their wealth management offering.
House prices climb at fastest rate since 2004
Figures from the Office for National Statistics (ONS) show that the annual rate of property inflation hit 13.2% in June, with this the biggest annual rise since November 2004. The data shows the average price rose by £31,000 to £266,000 over the past year, with pent-up demand and the Stamp Duty holiday helping drive the increase. Wales saw the biggest jump in house prices across the four countries of the UK, with an increase of 16.7% in the past year. In England prices were up 13.3%, while property price inflation hit 12% in Scotland and 9% in Northern Ireland. Regionally, North-West England led the way with an increase of 18.6% while London recorded the smallest annual increase at 6.3%.
John Lewis launches ISAs in push away from retail reliance
John Lewis is launching new savings accounts for customers as the group looks to reduce its reliance on retailing. The new ISAs will be provided through a collaboration with digital wealth manager Nutmeg, and offer customers the chance to buy a range of socially responsible funds. The company is aiming to generate 40% of group profits outside retail by 2030.
Stonegate to promote Spanish football
Stonegate has agreed a deal with Spanish football league LaLiga to show and promote its matches. The UK's biggest pub group will showcase the LaLigaTV channel in almost 100 key pubs. The move comes after LaLiga announced it had agreed to sell a stake to CVC Capital Partners in order to accelerate its international and digital expansion strategies.
Inflation drops to 2% in July
UK inflation fell to 2% in the year to July, with data from the Office for National Statistics (ONS) showing that the Consumer Prices Index (CPI) fell from the 2.5% recorded in the year to June. July’s figure brings inflation in line with the Bank of England's (BoE) 2% target and comes in lower than economists' forecasts that suggested an increase of around 2.3% was likely. While price falls in clothing and footwear drove the dip in inflation, the ONS said decreases in other areas were "largely offset" by price rises in transport. HSBC economist Liz Martins said that while the figure “puts the brakes on those who argue that inflation is about to go out of control … there are reasons to think it does go up further later in the year”. Samuel Tombs, chief UK economist at Pantheon Macroeconomics, believes July's drop in CPI inflation “will be short-lived”, with the rate set to rise to nearly 4% by year-end. Steven Cameron, pensions director at Aegon, said the fall in July “may look like a welcome reprieve” but it may be a “temporary blip ahead of further rises later in the year”. Luke Bartholomew, senior monetary economist with Aberdeen Standard Investments, said July’s decline is “welcome but likely to be relatively short lived”. Investec economist Philip Shaw said the figures “have provided markets with respite from what has seemed like relentless upside news on inflation”, although the coming months “are likely to see a resurgence”.
FTSE bosses take a pay hit
A report by the High Pay Centre think-tank shows that the median pay package of FTSE 100 chief executives fell to its lowest level since the financial crisis last year. Despite the dip, the rate was still 86 times the £31,461 median earnings of a UK full-time worker. FTSE 100 bosses were paid a median £2.69m, a 17% decline on the £3.25m paid in 2019. The fall came as a number of CEOs saw reduced annual bonuses and voluntary pay cuts amid the pandemic. Analysis shows that the number of FTSE 100 companies paying their chief executive a bonus fell to 64% from 89%, while those paying a long-term share incentive bonus dropped to 77% from 82%. Last year’s highest paid FTSE 100 chief executive was Pascal Soriot at AstraZeneca who received £15.5m. The High Pay Centre said that the “substantial fall” in chief executive pay and a narrowing of the pay gap with the wider workforce “will be welcomed by anyone concerned about economic inequality”. However, it added that it is “questionable” whether the reduction in median pay “represents a sufficient economy” given the “immense hardship” experienced by many, the accumulated personal wealth of CEOs, and the fact that firms “will have been in a much worse position without government intervention.”