Santander offers energy boost
With climbing energy prices driving the cost of living crisis, Santander is offering cashback on energy bills for certain current accounts. Customers opening a 123, 123 Lite, Select or Private current account will get 4% cashback, which has doubled from 2%, on their gas and electricity bills paid by direct debit in September and October. The bank has also raised the monthly cap on cashback from £5 to £10 per month for the two month period. This comes as experts predict that energy bills could rise to £3,358 from October and £3,616 from January. Santander is also offering a switching bonus of £160 for new and existing customers who open one of the accounts. Hetal Parmar, head of banking and savings at Santander, said the offers is an "added boost, putting more money in customer's pockets."
Bank of Ireland profit hits €335m
Bank of Ireland made a pre-tax profit of €335m in the first half of 2022, down 17% on the €406m profit in the same period last year. The bank's UK retail division, which includes its Northern Ireland business, saw its pre-tax profits increase by 20% from £139m to £167m. The bank highlighted one-off costs associated with taking on customers from Ulster Bank and KBC, both of which are winding down their operations in the Republic of Ireland.
Revolut expands crypto offering
Revolut is to offer 22 new cryptocurrencies to its UK customers, expanding the trading platform’s crypto offering to over 80 tokens. Revolut previously increased the cryptocurrencies available on its app to 60 tokens from 10 in 2021. Emil Urmanshin, crypto general manager at Revolut, said: “This is another big year of crypto, and we’ve given a big boost to our offering.”
Commerzbank’s Q2 profit hits €470m
Germany's Commerzbank has swung to a bigger-than-expected second-quarter net profit, with the €470m for the three months to the end of June coming after a loss of €527m a year earlier. Commerzbank reiterated that it would maintain its profit target of more than €1bn for the full year, though it slightly raised its cost target to €6.4bn from €6.3bn. The bank said that it took charges of €228m in the quarter related to the war in Ukraine, and that it had on hand €564m for any further war-related effects or impact from energy supply disruptions. Bettina Orlopp, chief financial officer of Commerzbank, said: “We are well equipped for upcoming challenges.”
TPR unveils plan to protect against pension scams
The Pensions Regulator (TPR) has unveiled a three-year plan to protect individuals from pension scams. The regulator will look to improve the co-ordination of intelligence between those fighting scams, reviewing its data-sharing agreements with the Money and Pensions Service and the Financial Conduct Authority. The scams strategy will educate industry and savers on the threat of scams; encourage higher standards; prevent practices that can harm savers’ retirement outcomes; and fight fraud through the prevention, disruption and punishment of criminals. Nicola Parish, TPR's executive director of frontline regulation, has called on the industry to be proactive in pension scam warnings, innovative in driving improvements in protection standards and reporting potential crimes to the authorities. She said: “Now is the time for the industry, regulators, and government to do more and truly work together to put savers at the heart of all that we do.”
FCA halves AR notification time
The Financial Conduct Authority (FCA) is reducing the pre-notification period for new appointed representative (AR) appointments from 60 days to 30 days. A consultation paper published in December saw the regulator propose that firms would be required to notify it of future AR appointments 60 days before the appointment takes effect. In updated rules in a new policy statement, the FCA said almost all respondents agreed with the proposal to require pre‑notification of AR appointments but some considered a 60-day advance notice to be too long and argued it might create business disruption. With this in mind, the City watchdog said it has decided to require a shorter pre‑notification period of 30 calendar days before an appointment takes effect. It added that this timeframe “would give us enough time to conduct an initial assessment of an AR appointment, where needed, and consider whether any further action is needed.” In relation to introducer ARs, the FCA has decided to require the same 30 calendar days notification period as for full ARs.
Lloyd's to launch second PCC
Lloyd's of London has set out plans to launch a new investment vehicle, with a view to drawing in institutional investors. The insurance market plans to set up a second protected cell company (PCC) following the successful launch of its London Bridge Risk PCC vehicle last year. Lloyd's said the investment vehicle “will provide an access point for qualifying institutional investors, to deploy funds in a tax transparent way into the Lloyd's market,” adding that members and managing agents “will be able to use the vehicle to manage their capital and risk management requirements by attracting new sources of capital and reinsurance protection.” The vehicle's launch comes after Lloyd's secured approval from the Prudential Regulation Authority and Financial Conduct Authority.
Cost of living pressure hits pension contributions
A survey commissioned by insurance and financial services group Canada Life shows that more than one in ten adults have stopped contributing to their company pension or are planning to stop because their incomes have been squeezed by the cost of living crisis. Office for National Statistics data shows that around eight in ten working adults had a pension in April 2020, up from fewer than five in ten in 2012 before the automatic enrolment scheme was introduced. The proportion of working adults with a pension rose until 2020, with this the first year to see stagnant levels of participation.
LEISURE & HOSPITALITY
Brits shun the pub as costs soar
The soaring cost of beer is driving drinkers away from pubs with more than half saying a night out is now too expensive. Recent industry figures estimate the average price of a pint in UK pubs has gone above £4 for the first time, but in some areas can be as much as double that. Research by the Campaign for Real Ale found that 52% of members believe prices are now "unaffordable". Camra has called for an energy price cap for hospitality firms, lower VAT and alcohol tax and reductions on draught beer and cider to help compete against supermarket prices.
Zoopla: Annual house price growth will slow to 5% by the end of 2022
The average UK house price has increased by 8.3% annually, pushing the typical property value to £256,000, according to Zoopla's index for June. This growth was well above the five-year average of 4.3%. Average home values are rising the fastest in Wales, where the property portal recorded a rise of 11.1% between March and June 2022. Zoopla expects levels of housing market growth to be back in line with the five-year average by the end of the year and to dip further in 2023. However, the property website said that forecasts of a market crash and double-digit price falls were “unwarranted," saying there is "no sign of a significant drop-off in buyer interest in response to higher mortgage rates and cost of living pressures.”
Visits to shopping centres and high streets dip below pre-pandemic levels
New figures have revealed that visits to high streets and shopping centres dipped to below pre-pandemic levels last month, with the north of England trailing behind the south in terms of the overall recovery from Covid-fuelled gloom. Footfall decreased by 14% in July compared with 2019, reversing gains made in April. Shopping centres were the worst-hit, down 18.6% compared with July 2019, while visits to high streets fell by 17% and retail parks were down 3.5%.
Services sector growth slows in July
Growth in the UK's service sector has slowed to a 17-month low. The monthly S&P Global/CIPS UK services PMI survey hit 52.6 in July, compared to 54.3 in June on an index where another above 50 represents growth. Tim Moore, economics director at S&P Global Market Intelligence, said: "Reduced levels of discretionary consumer spending and efforts by businesses to contain expenses due to escalating inflation have combined to squeeze demand." The report shows a considerable slowdown in input cost inflation, with this likely due to lower commodity prices and a gradual easing of global supply shortages, with it also shown that services firms are still hiring strongly. The combined PMI, which measures all activity in the private sector, also dropped to a 17-month low of 52.1 in July, down from 53.7 in June.
Bank of England set to raise interest rates to 1.75%
With the Bank of England looking to rein in record high inflation, markets expect the Monetary Policy Committee (MPC) to increase the interest rate by 50 basis points to 1.75% - its steepest increase 27 years. This comes with inflation at 9.4% - its highest in four decades – and predicted to hit 11% by year end, far beyond the Bank’s 2% target. The MPC has opted to increase interest rates at a record five consecutive meetings, with each of these seeing a 25 basis point increase. Many analysts expect the Bank to deliver a steeper increase today, taking the rate from 1.25% to 1.75%. Deutsche Bank is among those who believe a 0.5% increase is on the cards, predicting that the MPC will deliver a bigger increase despite the risk of an economic slowdown or a recession.
Think-tank in 15% inflation warning
The Resolution Foundation has warned that inflation could hit more than seven times the Bank of England’s 2% target, with the think-tank saying it could pass the 15% mark in early 2023. Inflation currently stands at 9.4% and the Bank’s Monetary Policy Committee is expected to increase interest rates further as it looks to tackle soaring costs. Jack Leslie, senior economist at the Resolution Foundation, said: "The outlook for inflation is highly uncertain, largely driven by unpredictable gas prices, but changes over recent months suggest that the Bank of England is likely to forecast a higher and later peak for inflation - potentially up to 15% in early 2023.”
Britain is Europe’s card fraud capital
Britain is the card fraud capital of Europe, with European Central Bank data showing that the UK sees 134 card frauds per 1,000 population. This is more than other major economies, exceeding the levels seen in France (115), Spain (37), Italy (19) and Germany (15). Britons also suffer the highest value card fraud, with the cost of fraud per 1,000 people in the UK at £8,833.20, compared to France (£6,069), Spain (£2,377.45), Germany (£1,885.09) and Italy (£965.60). The Social Market Foundation (SMF), which analysed the data, is calling on the Government to recruit more staff to stop fraud. SMF senior researcher Richard Hyde described Britain’s record on card fraud as “shocking,” adding: “Policymakers need to reflect further on why we're at this stage. Solving the crisis will take more than just increased police staff.” He said that while specialist staff “will certainly play a crucial role, the entire fraud law enforcement landscape needs an overhaul - with reforms that will transform the system and enact lasting change.”
Subscription spending slips
Analysis by Barclaycard Payments shows that 67% of UK consumers remain signed up to at least one digital or direct-to-door service, despite an overall decline in consumer spending on subscriptions. The study found that the average UK household spends £41.70 a month on subscription services, compared with an average of £51.65 in 2021, and £45.50 in 2020.