UK mortgage rates set to rise further
Santander has joined the UK’s other major high street lenders in pulling its entire range of mortgage deals for new customers after it was flooded with applications from borrowers desperate to refinance. The bank said it would relaunch its full range on Wednesday. Nationwide and HSBC repriced their mortgage offers last week as rising gilt yields drove borrowing costs up. Meanwhile, NatWest said it was increasing rates for new residential and buy-to-let mortgages, with rates on a two-year fix for the latter going up to 6.79% from 5.22%. Brokers say many landlords will not pass the stress tests for such deals. According to financial data firm Moneyfacts, the average two-year fixed-rate mortgage deal is 5.86%, while a five-year deal has hit 5.51%. Last May they were 3.03% and 3.17% respectively.
Sainsbury's revives £650m mortgage book sale
Sainsbury's is reportedly reviving efforts to sell its £650m mortgage book after calling off talks with the Co-operative Bank earlier this year. The supermarket giant is working with advisers on the sale of the assets, which it decided were not core to the future of its banking arm. Potential buyers have been contacted again in recent weeks about the portfolio. If completed, the sale would mark Sainsbury's Bank's formal exit from the UK mortgage market after it ceased new lending in 2019. The sale is being revived at a time of significant disruption in the UK mortgage market, with hundreds of deals being pulled amid expectations of further interest rate rises in the coming months.
US tech investment firm to open London office
US venture capital firm Andreesen Horowitz has praised the UK’s approach to crypto regulation as it announced plans to open a London office. Chris Dixon, head of crypto investing at Andreesen Horowitz, wrote in a blogpost: “While there is still work to be done, we believe that the UK is on the right path to becoming a leader in crypto regulation. The UK also has deep pools of talent, world-leading academic institutions, and a strong entrepreneurial culture.”
Calpers plans multibillion-dollar international venture capital push
Calpers, the largest public pension scheme in the US, is planning to invest billions of dollars in international venture capital.
UBS completes Credit Suisse takeover
UBS has completed its acquisition of Credit Suisse, three months after the Swiss government arranged a rescue deal to combine the two largest banks in Switzerland. The £2.63bn merger has raised concerns about job losses, lawsuits over the terms of the deal, and the impact of creating a Swiss megabank that would be too big to fail. Five of the most senior Credit Suisse executives left just hours after the deal was sealed. UBS CEO Sergio Ermotti and chair Colm Kelleher said “this is the start of a new chapter – for UBS, Switzerland as a financial centre and the global financial industry.”
JP Morgan settles Epstein victims lawsuit for $290m
JP Morgan Chase has agreed to settle a class action lawsuit filed by an unnamed Jeffrey Epstein victim last year. The bank agreed to pay $290m after a judge ruled that the lawsuit, alleging that the bank knowingly benefited from its former client’s sex-trafficking, could be widened to include dozens of women who claim to also have been abused by the disgraced financier.
Post-Brexit tariffs could cost EU carmakers £3.69bn
The European Automobile Manufacturers Association has warned that European automakers could lose €4.3bn (£3.69bn) and cut production of nearly 500,000 vehicles if the EU does not delay imposing new tariffs between the EU and UK. The industry group warned that China would be the biggest beneficiary if the EU does not agree to a British request to push the changes back from 2024 until 2027.
Heathrow workers call off summer strikes
Security workers at Heathrow airport have called off the first two days of strike action after receiving an improved pay offer. More than 2,000 staff said they will postpone industrial action on 24 and 25 June. Unite, the union, said that its members will vote on the latest pay deal over the coming days. However, if that is rejected, the remaining 29 days of strikes will go ahead as planned.
MPs to grill FCA over Odey AM probe
Financial Conduct Authority leadership will be questioned by MPs next month over the regulator’s handling of misconduct allegations against the hedge fund manager Crispin Odey, with a focus on protections for women in the financial services sector. Partners at Odey Asset Management ousted its founder after allegations that he sexually harassed as many as 13 women over a 25-year period. Meanwhile, the group insisted it was not considering blocking investors withdrawing money from any of its funds following rumours it would be gating certain EU investment funds.
UK car insurance costs set for further rise in 2024
A new sector forecast from Oxbow Partners predicts the cost of motor insurance will rise 14% overall this year, and 6% in 2024, before levelling out in 2025.
MEDIA & ENTERTAINMENT
US seeks to block Microsoft takeover of Activision Blizzard
The US Federal Trade Commission is poised to issue an injunction preventing the $69bn takeover of Activision Blizzard by Microsoft. The move comes as a boost to the UK’s Competition and Markets Authority (CMA) which had faced heavy criticism for its decision to block the deal on the grounds that it would reduce competition in the emerging cloud gaming market.
Companies rethink consultants as they fret about economic outlook
A new report shows more than three-quarters of professional services buyers had cancelled at least some existing projects or scrapped new ones as companies look to protect their profits.
Demand for London office space is crashing
Goldman Sachs has warned that demand for London office space is sliding steeply with deals in the sector down 40% compared with normal conditions. A rise in working from home since the pandemic has left over 14% of the capital’s floorspace is empty, up from around 9% before the pandemic. Meanwhile, high interest rates are putting developers’ finances under strain, leading some to consider selling off properties to reduce debt. Separately, the FT reports that investors have injected £2bn into converting unwanted London offices for new purposes as the shift to working from home reshapes the market.
Amazon using AI to help fight against fake reviews
Amazon says it is has invested in machine learning models to crack down on fake reviews and identify comments that aren't genuine. The technology enables the company to analyse thousands of data points to help it detect the fraudulent behaviour. The company said its fraud-detecting AI was able to look at a range of factors to calculate the likelihood that a review is fake. That can include the author's relationship with other online accounts, their sign-in activity, review history, and any unusual behaviour.
Haskel: Further rate hikes cannot be ruled out
Jonathan Haskel, a member of the Bank of England's Monetary Policy Committee, warned on Monday that further interest rate rises may be necessary to prevent inflation from becoming embedded in the economy. “My own view is that it's important we continue to lean against the risks of inflation momentum, and therefore that further increases in interest rates cannot be ruled out. As difficult as our current circumstances are, embedded inflation would be worse.” The money markets are anticipating that rates could hit 5.5% by the end of the year, up from 4.5% now.
ESG stymies UK defence supply firms
Paul Livingston, UK boss of defence giant Lockheed Martin, says small firms supplying the defence industry are being turned away for banking facilities due to environmental, social and governance (ESG) rules. "What we're seeing is small companies being refused even basic banking abilities, because they do defence," Mr Livingston said, speaking to MPs on a sub-committee set up to investigate how the UK buys arms. While Britain has a large and growing defence industry, these rules could ultimately harm the UK's competitiveness as a place to invest, he added.