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Daily News Roundup: Thursday, 7th January 2021

Posted: 7th January 2021


Bailey rejects idea Britain will take EU rules on finance

The Governor of the Bank of England said on Wednesday that Britain must be in full control of regulations covering the financial services industry, even if it means EU authorities refusing to allow access to markets across the Channel. Andrew Bailey told MPs on the Treasury select committee: “I would strongly recommend that we do not become a rule-taker. I think that is a very bad place to end up. If the price of that is no equivalence, then I’m afraid that will follow. That is the wrong outcome for the UK, but if that is where it goes. I am strongly opposed to rule-taking.” Treasury minister John Glen is set to lead post-Brexit talks with the EU this week to strike a “memorandum of understanding” that will guide future regulatory cooperation on financial services.

Banks shown to have multiple online security flaws

An investigation by Which? has uncovered worrying gaps in online banking security. A probe conducted with security experts 6point6 found Santander, Tesco Bank and TSB all have vulnerabilities in their systems that could leave customers exposed to fraud. Starling came out top while Barclays, HSBC and First Direct tied in second spot. Regardless of scores, Which? said it was concerned that the issues exposed by its investigation highlight that banks could do more to keep customers safer from criminals. About £207.8m was lost to bank transfer scams in the first six months of last year, industry figures reveal.

Mortgages will be unscathed by the 3rd lockdown

The news of a third lockdown may not limit mortgage options for homeowners and buyers as much as the previous COVID restrictions, according to new analysis from the Mortgage Advice Bureau. Brian Murphy, the head of lending at the Mortgage Advice Bureau, said: “We've recently seen a return to higher Loan-to-Value (LTV) products, with five of the top six providers now back offering products at the 90% LTV level and we hope to see this continue as more lenders have recovered much of their operational capacity despite most of their workforce working remotely.”

London’s lost EU share trading could be gone for good, warn City figures

Banks and asset managers have predicted that euro-denominated share trading lost by the City of London after the Brexit transition period expired may not return.


Lone Star pulls £3bn Quintain sale

Lone Star has scrapped the £3bn sale of its UK residential property company Quintain with the US private equity group deciding it could get a better price once the pandemic had eased.


Goldman shares hit record high

Goldman Sachs shares closed up 5.4% Wednesday, topping its 2018 high. The prospect of rising interest rates after Georgia’s Senate runoff elections pushed bank shares up across the board, with Bank of America up 6.3%; Wells Fargo enjoyed a 7.1% rise; Morgan Stanley added 6% and JPMorgan Chase climbed 4.7%. Goldman stock has risen about 19% over the past month, far more than any of its five big-bank peers.

Danish banks offer 'free' mortgages

at least two of Denmark’s biggest lenders, Totalkredit and Danske Bank, are to follow lender Nordea in introducing 20-year home loans at 0% interest, according to a Bloomberg report.


Travis Perkins to get new non-executive chairman

London First CEO Jasmine Whitbread is to step down to succeed Stuart Chambers as non-executive chairman at building material and equipment firm Travis Perkins.


Bitcoin restrictions announced by FCA

UK investors are to be restricted from buying bitcoin and other crypto currencies outside of certain conditions, with the Financial Conduct Authority banning the sale of certain products such as derivatives to retail investors. Bradley Duke, CEO of crypto firm ETC Group commented: “The FCA’s decision means UK based retail investors who want exposure to bitcoin and other cryptoassets will have to manage their own storage, which could increase their risk of losing keys and becoming a victim of cyber-crime. It also removes the ‘safety-net’ for retail investors that is provided by the suitability guidance of investment advisors when assessing the risk appetite and profile of their clients for these regulated products.” Sheldon Mills, interim Executive Director of Strategy & Competition at the FCA, noted however: “This ban reflects how seriously we view the potential harm to retail consumers in these products. Consumer protection is paramount here.”

LSE urges listing rules reform for fast growth companies

The London Stock Exchange has backed calls from the City for fundamental reforms to listing rules to attract fast growth companies to the UK, particularly the requirement for start-up owners to sell 25% of their business. The LSE also supports dual class shares, sources say. The Institute of Directors (IoD) also backed the push for such changes, but said it favoured leaving the main “premium” listing rules unchanged. Roger Barker, director of policy and corporate governance at the IoD, added: “The Government must proceed with caution. A race to the bottom to win extra listings would ultimately be self-defeating. Good governance is one of the UK’s key selling points.” Elsewhere, the Investment Association agreed the minimum free float requirement could be cut and advocated for a loosening of rules for Special Purpose Acquisition Companies or SPACs.

Zurich offers fully paid 'lockdown leave' in UK

Zurich has introduced fully paid “lockdown leave” for parents and other carers in its UK offices. The Swiss insurance firm’s UK division said it would offer two weeks’ paid leave for parents facing childcare emergencies because of the closure of primary and secondary schools across the country.


Boots and Lloyds to provide Covid jabs

Boots and Lloyds are among the high-street pharmacies that will start providing shots of the AstraZeneca coronavirus vaccine next week.


Informa forecasts conferences will return in June

Informa has predicted a 70% decline in profits for last year, as the events organiser said many exhibitions and conferences would resume in six months’ time alongside improved consumer confidence.


UK watchdog to investigate Nvidia’s $40bn Arm deal

The Competition and Markets Authority is preparing to launch a probe of Nvidia’s $40bn acquisition of UK chip designer Arm. The move comes after rivals raised concerns about the deal. The Mail’s Alex Brummer argues that the loss of Arm’s technology edge to Silicon Valley would pose a serious challenge to the UK’s economic security and to the firm’s Cambridge HQ as a source of R&D and intellectual property.

UK chipmaker sees revenue growth in 2020

British chipmaker Imagination Technologies saw revenues increase over 40% in 2020 despite senior executive departures and tension related to its Chinese owners. Revenues rose to $125m (£92m) last year, from $87m a year earlier, with adjusted earnings at $4m, compared to a loss of $18m in 2019.

Jeremy Darroch steps down as Sky CEO

Jeremy Darroch, the CEO of Sky, has announced he will step down from his position after leading the company for 13 years. Comcast executive Dana Strong will replace Darroch, who will become executive chairman until the end of 2021 to ensure a smooth transition.

Hipgnosis buying spree continues

Investment fund Hipgnosis has revealed that Neil Young has become the latest songwriter to sell his music to the London-listed firm, with 50% of the rights to all 1,180 of his tunes sold for an undisclosed sum.


UK curbs ground rents on leasehold properties

The UK Government will give 4.5m people the ability to cancel ground rents on homes they had bought for a fixed time period, following complaints of soaring costs charged by firms. Leaseholders will be able to extend their lease for 990 years at zero ground rent, Housing Secretary Robert Jenrick said in a statement on Thursday.


Alibaba plans to raise up to $8bn in dollar bond sale

Chinese ecommerce group Alibaba is to tap international debt markets for up to $8bn this month after the firm’s Hong Kong-listed shares fell nearly 25% since November.


New figures show pre-lockdown economic distress

IHS Markit’s purchasing managers index (PMI) survey for services reveals that the economy was flatlining in December even before new lockdown restrictions came into force. The index registered 49.4 for the month, a rise from 47.6 in November. Tim Moore at IHS Markit commented: “With a third national lockdown underway, service providers will be braced for a sustained period of subdued UK economic conditions and deferred client spending in the first quarter of this year. However, business optimism on a 12-month horizon was relatively upbeat in December and reached its highest level for almost six years, underpinned by hopes that a successful vaccine roll-out will help to deliver a strong economic rebound in the second half of 2021.”


New BBC chair could be former Goldman Sachs banker

Former Goldman Sachs banker Richard Sharp is expected to be named the new chair of the BBC, a role in which he would work closely with director general Tim Davie. The new leadership must contend with accusations of bias as well as argument over the future funding model of the corporation, amid suggestions that a subscription model could replace the licence fee.

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