BANKING
CMA hits out at banks over information errors
The Competition and Markets Authority (CMA) has criticised Lloyds and Barclays for mistakes made when giving information to price comparison websites, potentially misleading customers and breaking open banking rules. The CMA said both lenders had breached the rules by providing the wrong details across areas including transaction fees and overdraft fees. In two open letters, the CMA said that Barclays had breached the rules 13 times, while there were 10 examples involving Lloyds. The competition regulator said: “Failure to make continuously available accurate, comprehensive and up to date information on products and services can mean that consumers take wrong decisions and they may therefore choose financial products or services which are not best suited to their needs.” The CMA said it would not be pursuing further action against the firms due to “comprehensive” steps taken by both firms to address the issues.
INTERNATIONAL
Credit Suisse shakes up board
In an attempt to draw a line under a series of damaging scandals, Credit Suisse has shaken up its board, with this including the departure of vice chair Severin Schwan. The Swiss bank said Mr Schwan, who was its lead independent director, would not stand for re-election to the board of directors at the AGM on April 29. Another two of the 13 members of the Credit Suisse board, Kai S. Nargolwala and Juan Colombas, will also not stand for re-election, the bank said. The Zurich-based bank has nominated Christian Gellerstad to succeed Mr Schwan.
Lebanon's central bank governor charged with illicit enrichment
A Lebanese judge has filed charges against the country's central bank governor Riad Salameh, accusing him of illegal enrichment and money laundering during Lebanon's economic meltdown. The move came as the banking sector went on a two-day strike to protest recent moves by Lebanon's judiciary against local lenders.
FINANCIAL SERVICES
MPs to quiz regulators over BSPS scandal
The Public Accounts Committee will question Financial Conduct Authority (FCA) chief executive Nikhil Rathi as part of an inquiry into the British Steel Pensions Scheme scandal, with Financial Ombudsman Service chief executive and chief ombudsman Nausicaa Delfas and Caroline Rainbird, CEO of the Financial Services Compensation Scheme, also set to face MPs. They will be quizzed over a scandal that saw 7,700 BSPS members transfer a collective £2.8bn out of the pension scheme, only for some to find they had received unsuitable advice and incurred losses. The committee said questions will focus on “the activities the FCA has undertaken to regulate financial advice in the BSPS case”, as well as the watchdog’s plans for supporting those who may be entitled to redress and “the extent to which compensation is being delivered”.
FOS compensation limit increases to £375k
The Financial Conduct Authority (FCA) has confirmed that the Financial Ombudsman Services (FOS) compensation limit will increase from £350,000 to £375,000 on April 1. The limit will change to £375,000 for complaints referred after this date about acts or omissions by firms on or after April 1, 2019. For complaints before April 1, 2019, the compensation limit will be £170,000. The FOS said: “Our award limit is the maximum amount we can require a financial services firm to pay when we uphold complaints. This limit is adjusted each year in line with inflation, as measured by the consumer prices index.”
FSB monitors crypto amid Ukraine crisis
The Financial Stability Board (FSB), which represents central banks and finance ministries from across G20 economies, says it is monitoring the role of crypto assets amid the conflict between Russia and Ukraine, with this coming after financial watchdogs including the Financial Conduct Authority and Bank of England raised concerns that Russians are using digital assets to evade sanctions. Meanwhile, Financial Services Minister John Glen has said that the Government is considering new rules on blockchain technology which underpins many crypto assets, saying: “We think that these steps will actively support the Government’s response to Russia’s invasion of Ukraine.”
LSE offloads wealth management platform
London Stock Exchange Group is offloading its wealth management technology platform – known as Beta+ – to Motive Partners and Clearlake Capital Group for £837m. LSEG's Andrea Remyn Stone said selling Beta+ would allow the group to focus its wealth business on meeting our customers needs in high growth areas' such as data and analytics.
Crypto ads face increased scrutiny
With ministers looking to hand the Financial Conduct Authority greater oversight powers for the cryptocurrency sector, the Advertising Standard Authority is intensifying its scrutiny of advertising for high-risk cryptocurrencies.
LEISURE & HOSPITALITY
Betting sector warns against ‘intrusive’ regulation
The regulated betting and gaming sector says it will back the Chancellor’s economic recovery plan with investment, jobs and tax revenues, with Michael Dugher, chief of the Betting and Gaming Council (BGC), saying the industry was ready to help the Treasury recover public finances after the pandemic. However, he warned that it is “vital the industry’s contribution to sports, local communities, jobs and tax revenues, is not put at risk in the Gambling White paper and with well-meaning but naïve changes to regulation.” Mr Dugher warned that “intrusive restrictions” can drive players to the black market.
REAL ESTATE
House prices exceed £350,000 for the first time
House prices have hit a new record high of £354,564, according to Rightmove, with this marking the first time asking prices have risen above the £350,000 mark. The report shows that prices have risen by 1.7% in the last month – or £5,760 on average. This is the largest monthly rise since March 2004. Larger homes led the way, with price growth for properties with four or more bedrooms up 3.8% between February and March to an average of £647,112. Year-on-year, asking prices across all homes rose 10.4% in March, marking the fastest rate of annual growth recorded in any month since June 2014. Annual growth was above 10% for all UK regions and countries except London and Scotland. There were more than twice as many buyers as sellers in March, while the report also shows that more than one in five deals on Rightmove were agreed within the first week of being listed, a record high. Rightmove’s Tim Bannister believes values could slip in the coming months as recent interest rate increases – and ones forecast for the future – push up mortgage rates. He added: “Inflation and cost of living increases are also likely to affect buyer affordability and market sentiment.”
S&P: London house prices '50% overvalued'
The London property market is overvalued by as much as 50%, according to ratings agency S&P Global, with the analysis raising fears of a correction. The firm used long-term average prices of properties and compared them with income data for its calculations. Outside London, S&P estimated that UK property was overvalued by 20%. Alastair Bigley, a researcher for the agency, said prices have been driven higher by combination of low rates, the stamp duty holiday and excess savings amid the pandemic. He added that he expects prices to fall, saying: “We expect a greater correction in property prices in an overvalued market.”
RETAIL
Asda owners eyeing Boots
The Issa brother, owners of Asda and petrol station empire EG Group, are reportedly among those considering a possible £7bn acquisition of high street pharmacy chain Boots. US retail giant Walgreens is set to begin talks with interested parties this week. It is believed any bid for the company will be made directly by the brothers, in conjunction with their private equity partners TDR Capital, rather than through EG Group or Asda.
ECONOMY
National debt interest payments could surpass £84bn
The Institute for Fiscal Studies (IFS) has warned that the cost of servicing Britain’s national debt will hit more than £1,200 per person over the next year, saying that debt interest payments could surpass £84bn in 2022/23. This would be £31bn more than the Government’s budget watchdog predicted in October. Isabel Stockton, research economist at the IFS, said: “We estimate that higher retail prices index (RPI) inflation might add £20bn to next year’s debt interest spending, but I should stress that the uncertainty is huge here.” It is noted that with the Bank of England having raised interest rates three times in three months, higher rates will bump up the Government’s borrowing costs, while soaring inflation has an impact, with around £500bn of Britain’s £2.3trn debt pile pegged to the RPI. The Mail’s Lucy White says that while debt interest costs in cash terms are “ballooning”, they are still relatively low in historic terms compared to the size of the economy. Economists at Capital Economics think Chancellor Rishi Sunak has around £23bn of headroom against his promise to see debt falling as a share of the economy in three years’ time. The firm’s senior UK economist, Ruth Gregory, said Mr Sunak “has scope to unveil a big fiscal giveaway.”
Consumer spending jumps 19%
Nationwide data shows that consumer spending hit £6.9bn last month, marking a 19% increase on February 2021, with prices being driven up amid the cost-of-living crisis. Spending on fuel and electric vehicle charging rose by 70% year-on-year to £249m in February, while spending of utilities and bills increased 15% to £439m and debt jumped by 23% to £488m. Mark Nalder, the head of payments at Nationwide Building Society, said: “As inflation impacts how much money we can spend and where we are spending it, we expect overall spend to outstrip last year, particularly in areas where the rising cost of living is likely to be having a big impact, such as utilities, bills and fuel.” He added that Nationwide expects many households to curb non-essential spending “as they do their best to balance family finances.”
Economists expect inflation to climb again
Economists expect UK inflation to accelerate to its highest rate since 1991. Analysts at Bank of America expect inflation to hit 6% when the Office for National Statistics publishes the data this week, while Paul Dales, chief UK economist at Capital Economics, thinks it could be as high as 7% in December.
OTHER
Pensions triple lock will return next year
Pensioners will see their incomes rise by up to 8% next year, the Government has promised with the pensions triple lock set to be reinstated. Work and Pensions Secretary Therese Coffey has pledged that the Government would reinstate its commitment on retirement benefit increases from next year. The triple lock ensures that the state pension rises each year in line with whichever is highest out of inflation as measured by the Consumer Prices Index (CPI), average earnings, or 2.5%. Meanwhile, Labour has warned that working pensioners will be nearly £1,400 worse off over the next two years amid the cost of living crisis. This comes as a result of rising household bills, a hike in National Insurance and the suspension to the state pension triple lock. Shadow Work and Pensions Secretary Jonathan Ashworth has called for the upcoming National Insurance increase to be halted.