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Daily News Roundup: Tuesday, 6th June 2023

Posted: 6th June 2023


A fifth of people would choose a bank with a local branch

One in five 18 to 34-year-olds across the UK would choose a bank based on it having a nearby branch, according to a survey by financial services firm CRIF. While 21% of UK adults would be drawn to a bank with a local branch, among Italian savers the rate was 42%, while in France it was 33%, In Germany 32% said the same, as did 30% in Spain. In the UK, 26% want a bank that provides them with detailed budgeting and analysis of their spending, while 23% would choose a bank which shows them their credit score within their banking app. A fifth (21%) want to be able to submit information and documents digitally. Sarah Costantini, regional director for the UK & Ireland at CRIF, said young people in the UK “are leading the way in Europe when it comes to embracing digital and online methods of banking.” She added that banks “must now adapt and keep up with this shifting consumer demand.”

Average two-year fix rises by £35 a month

Analysis by Moneyfacts shows that the average two-year fixed-rate mortgage deal is £35 a month more expensive than it was a few weeks ago, with the interest charge up 0.3% since the latest inflation data was released in May. With the Bank of England now predicted to raise rates higher than previously thought, many lenders have increased mortgage rates and removed deals. The average two-year fixed rate on a £200,000 mortgage over a 25-year term is now 5.64%, up from 5.34% before the latest inflation data was published.


CVC plotting Center Parcs bid

Private equity firm CVC Capital Partners is pursuing a takeover of holiday resort chain Center Parcs. City sources say a number of infrastructure funds, including French-based Antin, are also exploring whether to make offers for the company. Center Parcs has been owned by Brookfield Property Partners since 2015. Brookfield has hired Bank of America, Barclays and Eastdil Secured to manage the sale.


UBS set to complete Credit Suisse deal

UBS expects to complete the acquisition of Credit Suisse as early as June 12, following a state-backed rescue deal that saw it snap up its rival for $3.25bn earlier this year. The combined entity will have invested assets of more than $1.5trn. The merger will create a combined workforce of around 125,000 worldwide, before expected job cuts. UBS has said it wants to significantly trim down Credit Suisse’s investment bank, although sources say UBS is looking to retain more than 100 Credit Suisse investment bankers across Asia as part of a plan to shore up talent in markets where its rival has a stronger presence. It is also planning a major leadership reshuffle, with Credit Suisse’s boss Ulrich Korner set to join the board. 


New car sales driven up as supply chain issues ease

Sales of new cars in the UK increased by 16.7% in May, marking the tenth successive month of sales growth. Data from the Society of Motor Manufacturers and Traders (SMMT) shows that electric cars made up 16.9% of sales, with a 58.7% increase of April’s total. SMMT chief executive Mike Hawes said: “After the difficult, Covid-constrained supply issues of the last few years, it’s good to see the new car market maintain its upward trend.”


Financial regulation shake-up plans return to parliament

Financial regulators will come under scrutiny as the Financial Services and Markets Bill returns to parliament this week, with a number of amendments having been put forward. Various proposals have been put forward to enhance the accountability of the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA). These include the introduction of a competitiveness mandate for the regulators. the Government has tabled measures that would see regulators report twice to the Treasury on how they have complied with a duty to “advance the competitiveness and growth objective.” Lord Bridges has tabled an amendment to create an Office for Financial Regulatory Accountability, with this body intended to “examine and report on the performance of the FCA and the PRA.” Separately, Lord Tyrie has proposed that the Regulatory Decisions Committee, a subcommittee of the FCA which takes contested decisions on behalf of the watchdog, should be made independent.

Binance accused of 'web of deception'

The US Securities and Exchange Commission (SEC) has accused crypto platform Binance of engaging in a "web of deception," saying the firm and its founder ignored rules meant to protect investors and ensure it can keep operating in the US. The SEC has outlined 13 charges, accusing the company and Changpeng Zhao of unlawfully soliciting investors and customers, misrepresenting the degree of trading on the platform and misleading the public about its oversight. SEC chair Gary Gensler said Mr Zhao and Binance "engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law."

Aviva joins dormant assets scheme

Aviva has become the first insurance and pensions company to join the UK's dormant assets scheme, which enables dormant assets to be used to support good causes. The scheme, which was first established for banks and building societies in 2011, allows dormant assets to remain the property of their owners, with the scheme matching what the business would have paid the owner had the cash proceeds of their assets never been transferred into the scheme.


Channel 4 defers bonuses and scraps exec pay rise

Channel 4’s top executives have deferred taking retention bonuses and scrapped a planned pay rise. While chief executive Alex Mahon, chief content officer Ian Katz and chief operating officer Jonathan Allan are still on course to take home millions in pay and other bonuses, they will indefinitely defer taking a retention bonus, which totals about £400,000 between them. The executives have also decided not to take an annual pay rise this year. The broadcaster has announced that other staff will receive a retention payment and pay rise.

Yaccarino replaces Musk as Twitter boss

Linda Yaccarino, the new chief executive of Twitter, has started the role earlier than expected, officially replacing Elon Musk, who will stay involved at the social media firm as executive chairman and chief technology officer. Ms Yaccarino was previously head of advertising at NBCUniversal. Twitter has also announced the appointment of another senior NBCUniversal executive, with Joe Benarroch joining in a position where he will focus on business operations.


Home sales taking twice as long

Houses are taking twice as long to sell as they did a year ago, with rising mortgage rates having an impact. On average, it took home sellers 49 days to find a buyer in May, up from 26 days in the same month in 2022, according to new analysis. Four-bedroom houses were slowest to sell, with it typically taking 60 days to agree a sale in May - more than double the 27-day average recorded in May 2022.


Bank holidays fail to boost sales growth

Sales growth slowed to its lowest level in six months in May, according to the British Retail Consortium Retail Sales Monitor, despite bank holidays delivering a trio of long weekends. Total UK retail sales increased by 3.9% last month, with this below the 5.2% rise in April and three-month average growth of 4.7% - but better than the decline of 1.1% recorded in May 2022. British Retail Consortium chief executive Helen Dickinson said: “With consumer confidence still recovering from record depths, and continued tightening of household incomes, we are unlikely to see substantial sales growth in the coming months.” She added that “with signs that inflation has possibly peaked, retailers are hopeful that confidence will continue to improve.” 


ECB chief signals further rate hikes

European Central Bank president Christine Lagarde says that with price pressures still "strong," the bank will raise interest rates high enough to bring down inflation and keep them there "for as long as necessary." She told the European Parliament's economic and monetary affairs committee that “there is no clear evidence that underlying inflation has peaked.” “Our future decisions will ensure that the policy rates will be brought to levels sufficiently restrictive to achieve a timely return of inflation to our 2% medium-term target and will be kept at those levels for as long as necessary," she added.


Service sector grows in May

UK services firms are continuing to grow, according to the S&P Global/CIPS UK services PMI. The survey showed a reading of 55.2 for May, slipping from 55.9 in April on an index where any reading above 50 is considered growth. The sector, which accounts for around 80% of the UK's economic output, reported the sharpest rise in business costs in three months. Firms said the increase in costs stems from rising staff wages, adding that this has driven an increase in prices. While firms also reported ongoing price hikes for raw materials, fuel costs are coming down.

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