BANKING
Banks urged to stop financing fossil fuels
A group of campaigners are calling on the UK's biggest high street banks to stop financing new oil, gas and coal projects. The Make My Money Matter campaign, which was founded by filmmaker Richard Curtis, has drawn support from celebrities including Emma Thompson, Stephen Fry and Aisling Bea – as well as businesses and charities such as Greenpeace. The campaign points to research by environmental charity Rainforest Action Network, which claims that between 2016 and 2021, HSBC, Barclays, Santander, NatWest and Lloyds funnelled almost £298bn towards the fossil fuel industry. It also found that in the same period, the lenders financed the 50 companies making the biggest investments in oil and gas projects to the tune of $141bn. Almost a third of HSBC, Barclays, Santander, NatWest and Lloyds' customers surveyed by the campaign said that they would switch bank if it was found to be financing the expansion of fossil fuel projects. Over 85% of customers said they did not think that their bank was doing enough to tackle the climate crisis.
Barclays leads on branch closures
Telegraph Money analysis shows that Barclays has shut more branches than any other, with data from Which? showing that it has closed 961 since 2015. Since January 2019, Barclays has announced 600 closures, over 260 more than TSB - which has the second-largest number set to close. The Telegraph also says Barclays has been the slowest bank to pass on interest rate rises to easy-access savers. Its Everyday Saver account paid an interest rate on balances less than £50,000 of just 0.01% until last September – nine months after the Bank of England first increased the Bank Rate. Halifax, Lloyds, Santander and NatWest increased their interest rates on easy access savings from 0.01% in April, while HSBC did so in March.
Barclays appoints investment banking heads
Barclays has appointed Taylor Wright and Cathal Deasy as new co-heads of investment banking. They will replace John Miller and Jean-Francois Astier and report to Paul Compton, global head of Barclays’ corporate and investment bank. Mr Compton said: “In their expanded and new roles, Taylor and Cathal will make a formidable team as we continue to progress building a resilient and diversified corporate and investment banking franchise.”
INTERNATIONAL
Former Swedbank CEO acquitted
A Swedish court has acquitted former Swedbank CEO Birgitte Bonnesen of charges of gross fraud and market manipulation over her handling of the bank's anti-money laundering protocols in Estonia. Prosecutors had accused Ms Bonnesen of giving misleading information to shareholders and the public - intentionally or through negligence - on the bank's measures to prevent, uncover and report suspicions of money laundering.
AUTOMOTIVE
Car industry output hits lowest level in 70 years
Car production in Britain has fallen to lows not seen since the 1950s. UK car factories produced only 775,000 vehicles in 2022, down from 859,000 in 2021. The latest figures mean output is down 40% on pre-pandemic levels seen in 2019 and 55% down from a high of 1.72m in 2016. Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, said British factories had been worse hit than their European counterparts from supply chain issues covering semiconductors, components from Chinese factories and wiring harnesses from Ukraine. He added that industry volumes had also been affected by soaring energy costs and a tight labour market.
AVIATION
Boeing losses increase
Boeing saw a net loss of $663m in the three months to December, down from $4.16bn a year previously. Annual losses widened from $4.29bn to $5.05bn. Total quarterly revenue at the plane manufacturer rose 35% to $19.98bn in Q4. Over the year, it climbed 7% to $66.6bn. CEO Dave Calhoun said supply shortages continue to disrupt production, warning that Boeing faces “a difficult, difficult supply chain,” adding that “while average deliveries met our objectives, we continue to face a few too many stoppages in our lines.”
EasyJet doubles profit forecast
EasyJet has increased its full-year profit outlook, saying it will not repeat the £545m losses it made in the half-year to March last year and will beat City forecasts of profits of £126m for its financial year to the end of September. Analysts now expect profits for the year of about £250m.
FINANCIAL SERVICES
FCA rules to target greenwashing
Industry leaders say new Financial Conduct Authority (FCA) rules will see the UK become a global leader in the fight against greenwashing. The FCA proposals aim to build “transparency and trust” by introducing labels to help consumers navigate the market of sustainable investment products. This comes as part of the watchdog’s efforts to clamp down on firms making exaggerated or misleading claims about the environmental credentials of their investment products. Industry body the UK Sustainable Investment and Finance Association said the rules represent an opportunity for the UK to establish “a world-leading regime” which could see the UK “proactively shape other countries’ approaches to disclosures and labelling in the coming years.” While the equivalent EU regulation only has two categories of sustainable fund, the UK has three, making it more differentiated and offering consumers more choice. The three labels are sustainable focus, sustainable improvers and, the highest label, sustainable impact. The FCA will publish its final rules and guidance at the end of H1 2023.
FCA criticises some consumer duty plans
The Financial Conduct Authority (FCA) has warned that some firms’ plans to implement its consumer duty have only considered the requirements superficially, while some have been over-confident that existing policies and processes will be adequate. In a multi-firm review, the financial regulator said some firms still need to work on embedding the consumer duty requirements into their businesses before the rules come into force on July 31, while noting that some need to prioritise their implementation plans more effectively. It also flagged that more focus needs to be given to sharing information between firms. The FCA said: “We urge firms to carefully consider the substantive requirements of the duty, as set out in our final rules and guidance.” A spokesperson for UK Finance said the trade body welcomed “the broadly positive findings in the FCA’s review of the extensive progress firms are making,” adding that “implementation is a significant and complex undertaking.”
Analyst charged in £1.5m insider trading case
The Financial Conduct Authority (FCA) has launched criminal proceedings against five individuals over claims they used insider information to illegally generate profits of £1.5m. The City watchdog claims Redinel Korfuzi, a former analyst at asset manager Janus Henderson, and associates Oerta Korfuzi, Iva Spahiu, Rogerio de Aquino, and Dema Almeziad allegedly used confidential information to make insider trades. It is claimed that Mr Kofuzi’s associates used a network of 49 companies to profit on the insider information by trading on Contracts for Difference derivative products. The insider trades saw those involved generate profits of approximately £1.5m from December 2019 to March 2021. All five individuals have also been charged with money laundering offences relating to over 170 cash deposits worth around £200,000. The FCA said Janus Henderson had fully cooperated with its investigation.
LEISURE & HOSPITALITY
Pub body calls for energy price probe
The British Beer and Pub Association (BBPA) has accused energy firms of profiteering, saying it has received “countless examples” of “price hikes and poor practice” which have negated Government efforts to support struggling businesses. The trade body has written to sector regulator Ofgem – as well as the chairs of the Treasury and Business Select Committees - calling for an investigation. BBPA chief executive Emma McClarkin said: “The spiralling cost of energy has been our members’ number one concern for close to a year now and remains so. Now, multiple reports of poor practice have compelled us to speak up on behalf of suffering businesses and make this urgent call.”
Martin calls for tax parity with supermarkets
JD Wetherspoon has reported that like-for-like sales increased 13.1% in the 25 weeks to January 22 compared with a year earlier, however this was 0.7% lower than the equivalent pre-Covid level. In the past 12 weeks, like-for-like sales were 17.8% higher year-on-year, but 2% lower relative to the pre-Covid level. Boss Tim Martin claimed that the biggest threat to the hospitality industry was "the vast disparity in tax treatment between pubs and restaurants and supermarkets."
MEDIA & ENTERTAINMENT
Murdoch ditches plan to merge Fox and News Corp
Rupert Murdoch has opted not to reunite his broadcasting and publishing media empire, saying the proposed move "is not optimal for shareholders of News Corp and Fox at this time." News Corp and Fox were split apart in 2013 but Mr Murdoch suggested re-combining the two companies last October. This drew public opposition from investors including investment management firm T. Rowe Price, the second largest shareholder in both companies after Mr Murdoch.
REAL ESTATE
Soaring costs drive down number of lone borrowers
Analysis by Halifax shows that just 37% of first-time buyers taking out a mortgage are purchasing a property on their own, marking a steep decline on 2014, when 57% of those getting on the property ladder bought on their own. The higher cost of living has played a part, with banks now willing to lend less as rising food and energy bills reduce how much people can afford to pay for their home loans each month. Higher mortgage rates also mean people may not be able to borrow as much and pass affordability tests, particularly if the application is based on one salary. The Halifax report also shows that while the overall number of first-time buyers is still higher than pre-pandemic levels at 362,461, this is down 11% on 2021’s record high of 405,320.
ECONOMY
Producer price growth continues to slow
Office for National Statistics (ONS) data shows that producer price inflation continued to slow in December. Producer input prices - the price of materials and fuels bought by UK manufacturers - rose by 16.5% in the year to December. This marks a slowdown from the 18% increase recorded in the year to November 2022 and the record high of 24% posted in the year to June 2022. December was the sixth consecutive month that the annual rate of input producer price inflation has slowed. Producer output prices - the amount UK producers receive for goods they sell to the domestic market - rose by 14.7% in the year to December. This compared to 16.2% in the year to November and 17.5% in the year to October. The ONS said the prices of equipment and petrol had driven the decline in both input and output producer price inflation. The annual rate of inflation for services sold by UK companies, known as the Services Producer Price Index, was 5.2% in Q4. This was down from a record high of 6.2% in Q3.
OTHER
Cost-of-living crisis widens wealth gap
The cost-of-living crisis and the freeze on the income tax threshold has increased the disparity between Britain’s richest and poorest earners. Office for National Statistics (ONS) figures show that while the richest Brits have managed to increase their household disposable income by just over £1,000 in the last year, the poorest are £600 worse off on average. The data shows that the wealthiest fifth have seen a 1.6% increase in their pay, with the average salary of those in the top bracket coming in at £66,000 a year. The ONS report says: “Wages and salaries increased by 3.2% across all households, however, the poorest fifth of people saw a 7.5% decrease, while the richest fifth saw a 7.8% increase.” Laura Suter, head of personal finance at broker AJ Bell, said: “The poorest fifth of the UK was hit by two factors: their wages failing to keep up with inflation and benefits falling in real terms, both of which had a dramatic impact on their spare cash.”