BANKING
£233bn stuck in zero-interest accounts
Analysis of Bank of England data by asset management firm Bowmore Asset Management shows that £233bn is being held in zero-interest accounts. Charles Incledon, client director at Bowmore, commented: “Savers have got used to a decade and a half where interest rates were effectively zero and there was little point shopping around for a better deal on your savings. Those days are long gone.” He added that people “need to be aware that savings in a zero-interest account are being eaten away at an alarming rate at the moment.” A Lloyds Banking Group spokesperson said customers were “proactively moving their money as their needs change,” while Barclays, HSBC and NatWest all said they offer competitive rates to savers. UK Finance said: “We would always encourage people to shop around for the product and interest rate that is suited to their need.”
Lobby group hits out at card payment costs
Lobby group Coadec has warned of a “startling" rise in the cost of accepting cards for small businesses. This comes with interchange fees, which are charged to merchants and paid to the card issuing bank and payment network, having soared in recent years. Coadec has called for alternative payment methods to be explored, pointing to alternatives like “open banking payments, or vital staples like cash.” Groups including Coadec, the Federation of Small Businesses and the British Retail Consortium last year launched the Axe the Card Tax campaign, calling for regulators to step in and reduce fees. The Payment Systems Regulator is currently conducting a market review of the fees paid to card payment networks. Mark Barnett, the European president of Mastercard, recently defended the current fee structure, saying: “We believe interchange is the right mechanism for everybody, sharing the costs and benefits of the payment system.”
95% of Brits anxious over shift to online banking
A poll for the Express shows that 95% of respondents are concerned about the shift to online banking as branches close. Research by Which? shows that 5,605 bank and building society branches have closed since 2015. Analysis by Age UK suggests that this leaves many older or vulnerable Britons are at risk, with 27% of over-65s and 58% of over-85s relying on physical banking services.
PRIVATE EQUITY
TPG to buy Angelo Gordon for $2.7bn
TPG has agreed to acquire alternative investment firm Angelo Gordon for $2.7bn. TPG said the acquisition "meaningfully expands" its business, bolstering its credit investing and property arms. The two firms collectively have $208bn of assets under management.
INTERNATIONAL
HSBC looks to grow in Asia
HSBC has disclosed new targets for its business in Asia. Chief executive Noel Quinn told investors and analysts that all parts of the lender’s operations in Asia “are now motoring” after a three-year push to funnel greater resources into its business in the region. HSBC is aiming for revenues in Asia’s wealth business to grow by up to 9% in the next three to four years and wants to grow lending by around 15% in the medium to long-term, which could take up to six years. Insurer Ping An, HSBC’s biggest shareholder with an 8% stake, has been calling for the lender to spin-off its Asian division into a separate company listed in Hong Kong.
SVB boss calls collapse 'unprecedented'
Former Silicon Valley Bank (SVB) chief executive Greg Becker says the bank’s failure was caused by "unprecedented" circumstances. In prepared marks, he is set to tell Congress: “I never imagined that these unprecedented events could happen to SVB and strongly believe that the leadership team and I made the best decisions we could with the facts, forecasts, and outside expert advice available to us at the time.” Meanwhile, former Signature Bank chairman Scott Shay will point to "truly extraordinary and unprecedented" events and say he disagrees with regulators' decision to take over the lender, telling the Senate Banking Committee: “I was confident that Signature Bank could withstand the economic earthquake that occurred on that day.”
Australian banks launch new platform to combat scams
Australian banks have launched a new platform, the Fraud Reporting Exchange, to combat scams. The platform will allow banks to quickly freeze money being sent to scammers by reporting bank-to-bank scam payments in close to real-time. The platform will give banks the ability to halt multiple fraudulent transactions taking place as part of the same scam and share intelligence to assist with loss prevention efforts. The Australian government has also pledged A$58m to fund a national anti-scams centre.
FINANCIAL SERVICES
FCA warns Sipp operators over complaints
The Financial Conduct Authority (FCA) has warned Sipp providers about the number of consumers reporting concerns to the Financial Ombudsman Service. In a Dear CEO letter to Sipp providers, Lucy Castledine, the FCA’s interim director of consumer investments, said that although firms have been “working hard” there are still a number of problems, particularly relating to historic issues. These include firm failures causing disruption of service for consumers, or additional costs being passed onto consumers. The FCA also highlighted pension scams and fraud, as well as consumers being allowed to make investments that should not be accepted in their Sipp. Ms Castledine told bosses there is a need to “ensure standards of conduct are high, including ensuring appropriate systems and controls, and operational and financial resilience are in place.”
City grandees set out vision for UK markets
The Capital Markets Industry Taskforce, headed by London Stock Exchange chief Julia Hoggett, is drawing up a “new market model” for the UK’s capital markets that will seek to “help deliver growth across the broader UK economy.” The new Capital Markets of Tomorrow report, from Freshfields lawyer Mark Austin, follows a number of government-commissioned reviews designed to deliver reform and keep London competitive. Mr Austin said issues raised in these reviews needed bringing together, calling for a “cohesive, simple to understand model and vision, which goes all the way across law and regulation, market practice and the cultural attitude and mindset.” Mr Austin will author the report alongside L&G chief Sir Nigel Wilson, Penny James, a senior independent director at Hargreaves Lansdown, and Alex Hickman, a former business special advisor to the Prime Minister.
Badenoch: The Government gets the City
Business and Trade Secretary Kemi Badenoch has reiterated the Government’s commitment to the City, telling businesses that they "want a government that gets the City, there’s no one better than the people who are in government right now to do that.” Speaking ahead of trade deal talks with her Swiss counterpart Guy Parmelin, Ms Badenoch said: “Pretty much my entire professional career was in financial services operations. We understand it. We get it. We’ve come from that world.” On the free trade deal with Switzerland, she said its “potential is limitless.” It is hoped the deal will lower tariffs on UK exports to Switzerland, with the Business Department saying this could save British businesses nearly £7.4m a year.
Osborne to chair Italian investment firm
Italian investment management firm Lingotto has hired former Chancellor George Osborne and veteran fund manager James Anderson. Mr Osborne will be non-executive chairman of Lingotto, which had around $3bn in assets under management at the end of March, while Mr Anderson’s role will be to invest in innovation.
LEISURE & HOSPITALITY
Minister calls for more data on tourism tax impact
Trade Minister Nigel Huddleston has called on tourism and hospitality businesses to give him data on how the 'tourism tax' is damaging the economy so he can argue the case for scrapping it. The former Tourism Minister said the decision whether to bring back the VAT refund for overseas visitors would be based on a “balance” between encouraging tourism and raising funds needed to pay for public services.
RETAIL
CMA to investigate possible ‘failure in competition’
The Competition and Markets Authority (CMA) is to investigate whether a “failure in competition” means consumers are being overcharged for groceries and fuel. CMA chief executive Sarah Cardell said that while the watchdog has “seen no evidence at this stage of specific competition problems … given ongoing concerns about high prices, we are stepping up our work in the grocery sector to help ensure competition is working well and people can exercise choice with confidence.” The CMA has also announced an update to its ongoing Road Fuel market study, which was launched last July to investigate whether fuel prices have been kept artificially high.
ECONOMY
Saunders: ‘Greedflation’ not to blame for price surge
Former Bank of England rate-setter Michael Saunders says ‘greedflation’ is not to blame for surging prices, insisting that businesses are pushing up prices in response to soaring costs. Mr Saunders, an ex-member of the Monetary Policy Committee who is now senior economic adviser at Oxford Economics, says isolated incidents of rising profits “do not reflect the overall picture” of the UK economy. In a note to clients, he said: “The bulk of UK food price inflation reflects cost increases from the international surge in prices for agricultural commodities and energy.” He noted that the cost of materials used by food manufacturers have risen by 29% over the last two years, with consumer prices also up 29% in the same period. Mr Saunders added: “Take out oil and gas, where profits have risen sharply, and the share of company profits in GDP has fallen markedly” to their lowest level since 2009.”
EU lifts economic growth forecast
The European Commission (EC) has raised its economic growth forecast, saying Europe has dodged a recession. The outlook for countries using the euro improved to growth of 1.1% this year from a prediction of 0.9% in February. Its economic growth forecast for 2024 was raised to 1.6% from 1.5%. EC vice president Valdis Dombrovskis said the European economy “is holding up remarkably well in the face of Russia’s aggression against Ukraine.” However, he also cautioned that ”core inflation remains persistently high, which could erode people’s purchasing power, slow investment growth and impede access to credit.”
OTHER
Reputational damage caused by pandemic support fraud `a blip´
Cabinet Office Permanent Secretary Alex Chisholm has told MPs that the reputational damage done to the UK by the high level of fraud involving Covid-19 support schemes was a “blip.” He told the Public Accounts Committee that he expects the UK’s reputation to improve due to Government efforts to improve how departments and national bodies handle fraud. The Public Sector Fraud Authority estimates that there was between £33.2bn and £58.8bn of fraud and error across Government spending in 2020/21. Data from annual reports of Government departments and arms-length bodies show an estimated £21bn was specifically lost to fraud in 2020/21 and 2021/22, compared with £5.5bn in the two years before the pandemic. A report by the National Audit Office said the latest Transparency International survey of perceptions of corruption showed the UK had fallen from eighth out of 180 countries in 2017 to 18th in 2022.