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Daily News Roundup: Tuesday, 23rd August 2022

Posted: 23rd August 2022


Typical two-year fixed mortgage rate goes above 4%

The average interest rate on a two-year fixed mortgage has crept above 4% for the first time in almost ten years, following the Bank of England's latest base rate increase. An average two-year fixed rate mortgage is now at 4.09%, according to Moneyfacts: 62.3% more expensive than the same time last year when it was at 2.52%. It marks the first time the rate has breached 4% since February 2013 when it hit 4.09%. A typical fixed five-year mortgage - now a more popular option as buyers seek to shield themselves from further rate rises - has risen from 2.75% last August to 4.24% today.


Credit Suisse appoints new finance chief in management shake-up

Credit Suisse has recruited Deutsche Bank’s Dixit Joshi as chief financial officer and promoted Francesca McDonagh to chief operating officer as the Swiss lender’s new boss overhauls the top ranks. Ulrich Körner is trying to put the bank back on track after years of scandal and losses. Additionally, Michael Bonacker has been named group head of transformation and Michael Rongetti has become interim head of the asset management business. 

Goldmans gender bias lawsuit set for June 2023 trial

A U.S. federal judge has rejected a bid by Goldman Sachs to dismiss most of a 12-year-old class action law suit alleging widespread bias against women in pay and promotions. The plaintiffs accused Goldman of systematically paying women less than men and giving women weaker performance reviews that impeded their career growth. The case will now go to trial next June.

Citi’s forex global head to depart

Itay Tuchman, the global head of Citigroup’s foreign exchange business, plans to leave the U.S. bank after more than two decades, according to an internal memo seen by Reuters on Monday. Stuart Staley will replace Tuchman with immediate effect.

HSBC ups price targets on Greek banks

HSBC said in a research note that it had raised its price targets on shares of Greece's four largest lenders after they posted strong performances in the first half, saying Eurobank and Piraeus Bank were its top picks.


Ford prepares to shed 3,000 employees and contract staff

Ford is cutting 3,000 white-collar and agency staff in the United States, Canada and India as part of efforts to cut costs as it makes the transition to becoming an electric car maker and battery producer.


BA to cut 10,000 Heathrow flights

British Airways will cut roughly 10,000 short-haul flights to and from Heathrow Airport between late October and March as it continues to struggle with industry-wide staff shortages. BA cut around 10,000 jobs in the Covid crisis as it burned through cash during repeated lockdowns. Along with others in the industry, it has since struggled to hire enough workers to cope with the post-pandemic rebound in demand. The move is designed to minimise disruption over the winter. The airline has also cancelled all departures to China and Bangkok because of Covid restrictions.

Wizz Air CFO departs

Wizz Air’s chief finance officer is leaving the airline in the coming weeks after less than two and a half years in the job. The company said Jourik Hooghe was off to "pursue opportunities outside of the company". His departure comes after results showed the airline lost €452m in the latest quarter, significantly worse than its budget rivals Ryanair and easyJet. Separately, Hungarian officials have ordered an investigation into the low-cost carrier over possible breaches of consumer protection laws. Shares fell 10% on the news.


UK workers lured to City in search of higher pay

A new survey shows around a quarter of Britons want to move into the financial services sector, drawn by the high salaries and bumper bonuses handed out by banks, brokers and insurers. City firms have been prompted to hike pay as they compete for talent and turn to historically under-represented workers to fill roles. Experts say that in the competition for talent, financial services firms should consider extending the scope of their search to include non-traditional pools of talent which can help boost diversity and inclusion.

Pricing reforms reshape personal insurance market

A crackdown on insurers penalising loyal customers has meant almost 800,000 fewer people are expected to switch providers when they renew their motor cover this year.

Global scope of EU’s greenwashing crackdown spooks Wall Street

US banks have been left stunned by the EU’s new ESG reporting rules, which some argue are so “bonkers in their extraterritoriality” that they risk killing off European capital markets.

Chrysalis forecasts boost in fortunes for start-ups

UK investment trust Chrysalis believes the worst is over for young tech stocks following a rebound over the summer. The trust predicts a bounce back for their fund, whose value has plunged 65% since January.


UK urgently needs a microchip strategy, says Arm boss

The boss of Cambridge-based Arm Holdings has urged the UK Government to do more to shore up the country’s semiconductor industry. Rene Haas described chips as “the lifeblood to everything we do” and said Britain had “fantastic strengths in design capability and in compound semiconductors and both are fairly critical to the overall global supply chain that goes into the electronic space.” In terms of improving its digital autonomy, the UK is falling behind the US and Europe, which have both brought in legislation to make their semiconductor supply chains more resilient. Britain has yet to publish the findings of two reviews into the sector. Mr Haas said that he would like to see more research and development tax credits and greater support in bringing skilled workers into the UK.


Cineworld on brink after refinancing efforts fail

Analysis of Cineworld’s accounts by the Telegraph shows the cinema operator spent more than $100m (£85m) in fees over the past two years as it scrambled to secure a string of new debt agreements. Its repeated refinancing efforts have failed to prevent a crisis, however, and the company is now considering its options for a rescue deal, including a voluntary Chapter 11 bankruptcy filing in the US.


Rising cost of living puts squeeze on Hammerson

Shares in Hammerson have dropped 14% after inflation warnings sparked fresh fears that shoppers will start tightening their belts. The owner of the Bullring shopping centre in Birmingham and Brent Cross in London saw shares plunge during the pandemic as shoppers were forced to stay indoors. Now its post-pandemic recovery could be under threat as the cost of living crisis sees consumers pull back on spending.  Hammerson, which also owns shopping centres in Reading and Southampton, has faced downbeat forecasts from analysts concerned as to whether the economic turmoil will hinder its restructuring progress.


UK inflation could hit 18% next year

Rising energy prices could push UK inflation beyond the 18% mark next year, the highest rate in nearly 50 years. A forecast from Citigroup said inflation was "entering the stratosphere" and would reach 18.6% in January, with affordability concerns “growing more deafening by the day”. Elsewhere, the Resolution Foundation said inflation could reach 18.3% while Goldman Sachs are forecasting a rise to closer to 15%. Officials at the Bank of England expect inflation to peak at just over 13% in October, when households receive their winter energy bills. The revised forecasts came on the back of a decision by Gazprom, the Russian state energy company, to close the Nord Stream 1 pipeline to Europe for three days for what it described as maintenance reasons. This sent the wholesale price of gas up 37% on Monday.

Euro falls to two-decade low

The euro hit a 20-year low and sterling slipped to its worst level in two years as markets were gripped by fears of further rises in gas prices on Monday. Jordan Rochester, currency analyst at Nomura, warned the euro could come under more pressure on currency markets and risks falling lower over winter as markets are “not pricing this recession risk properly”. The energy shock increased fears that Germany could slip into a recession over the winter. Germany’s Federal Statistics Office said on Monday that exports outside the EU fell by 7.6% in July while exports to Russia fell 56% on the year. In July German producer prices jumped at the fastest pace on record.

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