FCA urges Brits to seek help if facing financial difficulties
The Financial Conduct Authority (FCA) on Wednesday advised Brits to seek help as soon as possible if they are having financial trouble. Over two-fifths of Britons suffering financial hardship during the cost of living crisis did not respond when their lender tried to contact them about their difficulties, the FCA said. Research by the regulator found half of those borrowers in financial difficulty who waited more than a month before seeking help regretted not reaching out sooner. The FCA said consumers should contact their lender if they were struggling to make payments.
Demand for debt services by Lloyds customers jumps 30%
Lloyds Bank customers are increasingly seeking out debt services from the bank as the cost of living crisis leaves people worried about rising prices and the impact it is having on their savings. Lloyds said 20% of its customers are already cutting back on their discretionary spending to make sure they can cover the cost of essential items. CEO Charlie Nunn said customers were getting a grip on their finances by consolidating their debts. Nunn added that eight in 10 of Lloyds customers have less than £500 of savings in their current and savings accounts.
HSBC closes in on deal to sell Russian business to Expobank
HSBC is in discussions about a sale of its Russian subsidiary to local lender Expobank. The operation had assets of $1.4bn and almost 250 employees as of the end of June 2021. Expobank, owned by Russian entrepreneur Igor Kim, has offices in over 50 Russian cities and covers corporate and retail banking and other financial segments. Neither the bank nor its owner are sanctioned.
BNY Mellon appoints McDonogh as CFO
Bank of New York Mellon Corp has appointed Goldman Sachs veteran Dermot McDonogh as its chief financial officer. McDonogh will join in November and replace Emily Portney as CFO in February.
BA cancels another 10,000 flights over summer
British Airways has cancelled some 10,300 short-haul trips that were scheduled to run from the start of August until the end of October. The cuts come on top of 16,000 cancellations announced in May. BA and its rivals are facing a staffing crises having sacked thousands of staff during the pandemic. The airline reportedly took the decision on Wednesday to take advantage of the Government’s “slots amnesty”, which closes on Friday.
House building shrinks for first time since Covid struck
UK house building has stalled amid economic slowdown brought on by the cost of living crisis, according to a closely watched survey. Activity in the UK house building sector dropped for the first time since May 2020, when the country was under strict pandemic restrictions, according to S&P Global’s final purchasing managers’ index (PMI) for June. House building has propelled the UK’s construction industry over the last two years, primarily driven by demand in the property market being stoked by a stamp duty holiday and record-low interest rates. However, in a complete reversal, it “now finds itself as the worst-performing broad category so far in 2022,” Tim Moore, economics director at S&P Global, said.
Glen leaves role as financial services minister
Britain's financial services minister John Glen resigned yesterday in protest against Prime Minister Boris Johnson, just days before the Government is due to unveil a draft law to “reset” a post-Brexit financial sector. In his resignation letter, Glen said: “I can no longer reconcile my commitment to the role and to the financial services sector with the complete lack of confidence in your continuing leadership of our country.” His departure comes after Rishi Sunak stepped down as Chancellor on Tuesday. Sunak had been due on July 19 in a first “State of the City” speech at London's Mansion House to set out a new financial services law to ease rules on insurers, capital markets and encourage more retail investing by exploiting Britain's post-Brexit “freedoms” to write its own regulations. The FT states that Glen’s departure has been greeted with dismay by the Square Mile, who praised him for being on top of his brief steering post-Brexit regulatory reform.
Voyager Digital files for bankruptcy
Crypto lender Voyager Digital filed for voluntary Chapter 11 bankruptcy in the US on Tuesday following prolonged volatility and contagion in the crypto markets over the past few months. The New Jersey-based firm estimated that it had more than 100,000 creditors and somewhere between $1bn and $10bn in assets, and liabilities worth the same value.
M&G buys stake in Finance Ireland
International savings and investments firm M&G has bought a 41% stake in Finance Ireland, Ireland's largest non-bank lender. Will Nicoll, Chief Investment Officer of M&G's Private & Alternative Assets division, said: “Finance Ireland is well positioned to take advantage of favourable structural changes as some banks withdraw for core areas of lending.”
UK investment lobby seeks clearance to establish blockchain-traded funds
The Investment Association is pushing for the Government and the Financial Conduct Authority to approve blockchain-traded funds that will issue digital tokens instead of shares or fund units.
GSK investor support for spin-off vindicates rejection of Unilever bid, says chief
A shareholder vote in favour of spinning off GlaxoSmithKline’s consumer healthcare business vindicated the UK drugmaker’s decision to turn down a £50bn takeover offer from Unilever for its joint venture with Pfizer, the company’s CEO Emma Walmsley said. Some 99.8% of investors who voted at the company’s general meeting backed two resolutions needed to enable the demerger of Haleon, which is the combination of the consumer health businesses of GSK, Pfizer and Novartis. Haleon will list on the London stock market as planned on July 18th with an estimated value of just over £33bn.
Investors pour £22m into Impact Healthcare
Investors have pumped over £22m into a London-listed healthcare real estate investment trust (REIT). Impact Healthcare REIT, which specialises in care home investments, has grown its market capitalisation north of £450m since migrating to the premium listing segment of the London market in 2019. The funds from a share placing, which the board announced just two weeks ago, will help the company continue its acquisition spree, which most recently saw it snap up three homes in the south west for £25m.
Booming pay and job moves boosts recruiter Robert Walters
A booming jobs market boosted second-quarter net fee income by a quarter at Robert Walters, the recruitment firm specialising in accounting, legal, financial services and tech jobs. Net fee income climbed to a record £112m in the three months ended June 30, from £89m a year ago. Alan Bannatyne, finance director of the recruitment firm, said that the company had seen wage increases of 20-25% for workers moving companies. “It's a hot market with not enough candidates,” Bannatyne said. “That creates job churn, which makes for a good market for us.”
UK house price growth slows
Requests for property valuations have hit their highest since the start of the year, the latest research has revealed. House price growth has been slowing since the beginning of the year, according to the country’s most-watched indexes. While still breaking new records, the Nationwide House Price Index revealed that the figure grew 10.7% in June, to an average of £271,613. However, growth was more subdued than in the previous month, which saw the cost of a home climb 11.2%.
CMA probes Amazon over listings practices
Amazon is under investigation in the UK over concerns that the company is giving an unfair advantage to certain sellers on its marketplace. The Competition and Markets Authority (CMA) said that Amazon's practices may be anti-competitive and leading to worse deals for customers. The investigation will centre on how Amazon decides which products are given preferential listing spots. The move comes as Brussels closes in on a deal with the online retail giant amid EU competition concerns. According to the Financial Times, Amazon plans to share more data with rivals and offer buyers a wider choice of products as part of the agreement which is expected to be formally agreed after the summer.
Consumer confidence plunges
Consumer confidence in the economy has plunged to its lowest point since the start of the pandemic, according to research by Which? The consumer group found only 8% of consumers felt the UK economy would improve over the next 12 months. This compared with 78% who thought it would worsen, resulting in a net confidence of -70 compared to -47 in May. Confidence in future household finances also dropped to the same level as in March 2020 with six in ten people saying their household had been forced to either cut back on essentials or dip into savings, to cover spiralling costs in the past month.
Huw Pill signals willingness to step up rate rises
The Bank of England’s chief economist Huw Pill said on Wednesday that he would be willing to step up the pace of policy tightening if the conditions merited it. The BoE expects inflation to rise from its current rate of 9.1% to about 11% in the autumn, and Pill said the resulting hardship for those most exposed to rising living costs showed it was “essential we bring inflation back down to target”. His comments come after the Bank’s deputy governor Jon Cunliffe said the BoE would do “whatever is necessary” to contain inflation.
MI5 and FBI chiefs warn of ‘immense’ threat from China
In an unprecedented joint appearance in London, MI5 chief Ken McCallum and FBI director Christopher Wray warned that China posed an immense threat to the economic and national security of the West. Aside from the ongoing likelihood of China invading Taiwan – a move Wray said would "represent one of the most horrific business disruptions the world has ever seen" – Beijing was interfering in politics and engaging in a sustained effort to steal Western advances in technology, research as well as to use the West's democratic, media and legal systems to their own advantage. "The most game-changing challenge we face comes from the Chinese Communist Party," Mr McCallum said, speaking to an audience of executives from technology companies and other officials invited to the talk at Thames House on Wednesday. "It's covertly applying pressure across the globe. This might feel abstract. But it's real and it's pressing. We need to talk about it. We need to act."