Skip to Content
Skip to Main Menu

Daily News Roundup: Tuesday, 8th November 2022

Posted: 8th November 2022


FCA expresses concern over mortgage arrears

The Financial Conduct Authority has warned that 770,000 households could be at risk of missing mortgage payments in the next two years because of rising interest rates and sky-high inflation. Nikhil Rathi, the authority's chief executive, told MPs that it defined mortgage holders as "at risk" if more than 30% of their gross income went towards monthly repayments. First-time buyers who may have "stretched themselves" are of particular concern, Rathi added. Richard Lloyd, the interim chairman of the regulator, added that the FCA was ready to force banks into providing better protection to borrowers and mortgage holders. “This is extremely stressful for individuals, for their mental health and finances in a way that people haven't experienced in the housing market for some time,” he said.

‘Money saving expert’ more trusted than banks

A new survey reveals that 47% of people would rather turn to Martin Lewis’s MoneySavingExpert website for financial advice than call up their own bank and ask for help. The same proportion said they would seek advice from friends and relatives, but only 41% felt comfortable seeking help from their main current bank or building society. Just under a third said they would consider the opinion of social media influencers. Women are less likely to look to banks for advice than men by a considerable margin.


UK private equity deals slump

Private equity deals have slowed as firms hold out for falling valuations, according to research from ADDX, a digital exchange for private markets. The number of deals closed in the UK has slumped 20% to 440 in the year to September, down from 550 the year prior. “Being able to acquire businesses at unexpectedly low valuations during periods of economic stress is a key driver of elevated returns after the economy bounces back from a trough,” analysts at ADDX said.

CVC makes £1.5bn approach for IWG's digital arm

CVC Capital Partners is among a number of buyout firms which have approached IWG, about acquiring The Instant Group, its digital arm. Tim Rodber, The Instant Group's chief executive, had been marketing the business to a number of private equity firms in recent weeks, sources told Sky News.


ECB urges caution over payout plans

The European Central Bank has told banks to factor in the risk of a recession when estimating how much capital they will be able to pay out in dividends, buybacks and bonuses. The ECB's top supervisor Andrea Enria said risks to the banking sector have increased and the current environment is characterised by substantial uncertainty. "Banks must therefore remain prudent, proactively adjust their strategies and planning, and continuously monitor and manage risks stemming from the current environment."


Ryanair swings to first-half profit and raises passenger forecast

Ryanair on Monday reported pre-tax profit of €1.42bn for the six months to September 30, against a €100m loss in the same period last year. The results were broadly in line with investor expectations. Chief Michael O’Leary commented on the ongoing pressure to reduce air travel to save the planet, stating that flight-shaming campaigners such as Greta Thunberg have had little impact; “we don’t pay too much attention to them,” the Irish executive said. What could reduce CO2 emissions from aviation at a stroke would be to break state control over Europe’s air traffic controller market, which could cut delays by 90%, Mr O’Leary said.


Regulators turn focus on leveraging after pensions meltdown

The shadow banking sector is leaving taxpayers increasingly exposed to growing "systemic risks" presented by financial institutions, the Bank of England’s head of financial stability strategy and risk has said. Sarah Breeden, executive director at the Bank, said central banks were forced to "use public money to remove the threats to financial stability" because of gaps in the rules that govern non-banks including insurers, pension schemes and hedge funds. "Central banks cannot be a substitute for the primary obligation of market participants to manage their own risk, or for internationally co-ordinated reforms that enhance the resilience of the non-bank financial sector." Nikhil Rathi, the chief executive of the Financial Conduct Authority (FCA), echoed the sentiment, telling the Treasury Select Committee tougher rules for pension fund consultants could have helped avoid the meltdown last month. Pension funds with leverage driven investment strategies were caught out by rapidly falling gilt prices forcing them into a wave of asset sales. "Perhaps if their advisers had been more sensitive to dealing with levels of stress like this, some of that risk would have been managed more effectively," he said.

FCA opposes new powers to overrule regulators

The Financial Conduct Authority (FCA) has criticised proposals to allow ministers to overrule City regulators. The Government wants to include the powers in the Financial Services and Markets Bill to allow ministers to “direct a regulator to make, amend or revoke rules.” But Richard Lloyd, interim chairman of the FCA, said the “call-in” power would “clearly undermine our independence.” Lloyd said: “Our international reputation and indeed our competitiveness in financial services is in part built very clearly on the independence of regulators.”

Tiger Global losses mount after whipsawing tech valuations

New York-based hedge fund Tiger Global Management lost 5.4% in October, taking losses so far this year to a new low of 54.7%. Tiger blamed its losses on high inflation and rising interest rates on technology stocks.


Profits drop at BioNTech as Covid vaccine demand wanes

German pharmaceutical group BioNTech said on Monday said it expected 2022 revenues of between €16bn and €17bn, at the top end of the €13bn-€17bn previously forecast but down from €19bn last year. Increased shipments of its COVID-19 boosters, higher prices and positive foreign exchange movements helped push revenues up. However, net profit fell from €3.2bn in the third quarter of 2021 to about €1.8bn.


UK house prices show steepest decline since February 2021

Halifax said on Monday that average house prices in the UK slid 0.4% between September and October, the sharpest drop in 20 months, as a surge in borrowing costs hit the property market. Annual house price growth slowed to 8.3% in October, from 9.8% growth recorded in September. Across the UK, the average house price in October was £292,598, which was the lowest figure since May this year, although typical prices remained near record highs, Halifax said.


UK retailers braced for tough Christmas

Figures from the British Retail Consortium show retail sales slowed in October in the latest sign that consumers are reining in spending on non-essential items. The value of sales rose by 1.6% last month, compared with the same month in the previous year. Separate figures from Barclaycard showed card spending was up 3.5% on last October – higher than September's 1.8% but well below the 8.8% rise in consumer inflation.


Liverpool FC put up for sale by Fenway Sports Group

Fenway Sports Group is exploring a sale for Liverpool FC, making the English Premier League club the latest top flight sports asset to come on the market. Boston-based FSG is being advised by Goldman Sachs and Morgan Stanley after it was approached by at least one potential buyer.


Pill: Bigger tax hikes could mean lower interest rates

Bank of England chief economist Huw Pill said on Monday that a bigger tax raid by Jeremy Hunt in next week’s Autumn Statement could dampen down demand and lower the peak for interest rates. “We would set interest rates a little bit lower, we speed the economy up, we boost spending through monetary policy in order to offset that effect and we still ensure that inflation is back at 2%,” he said, discussing a scenario where the Chancellor puts up taxes by more than the Bank expects.


British families suffer biggest hit to incomes in G7

Figures from the Organisation for Economic Co-operation and Development (OECD) show real UK household income dropped by 3.5% between the end of 2019 and the second quarter of this year. This means Britain is suffering the worst cost of living crunch of any G7 nation. France experienced a drop of 0.3% over the same period while real incomes rose in countries including Germany and the US. However they are also starting to suffer under the weight of rising energy prices and other costs. Overall, OECD nations have seen real incomes per capita drop for three consecutive quarters so far - the longest squeeze suffered since 2007.

Close Menu