Zopa raises rate on its easy-access savings account
Zopa Bank has raised the rate on its easy-access savings account to 1.81%, ahead of the previous market-leading Shawbrook Bank account, which pays 1.75%. The new Zopa rate just exceeds the Bank Rate and means a saver with £10,000 on deposit will earn about £182 in interest over the course of a year. The move by Zopa comes after banks were widely criticised for failing to pass on the Bank of England’s six consecutive Bank Rate rises since December onto savers. So far, two dozen banks including Virgin Money, West Brom Building Society, and Leeds Building Society, have raised rates on either fixed-rate or easy access savings accounts since last week’s interest rate hike, according to Moneyfacts.
Mortgage lenders start dissuading new customers
A number of building societies have stopped taking new mortgage applications as they work to clear backlogs following a surge in demand amid a rise in borrowing costs. Some high street lenders are even raising mortgage rates to avoid offering market leading deals, says Brian Murphy, at the Mortgage Advice Bureau. Coventry Building Society, Suffolk Building Society and Saffron Building Society have all temporarily stopped taking new applications, the Telegraph reports.
Carlyle boss quit after failed request for $300m pay package
The FT reveals that the reason for the departure of Carlyle boss Kewsong Lee was due to his request for a $300m three-year pay package, rejected out of hand by the private equity firm’s co-founders.
SoftBank's $23bn loss revives buyout debate
The FT suggests SoftBank’s record $23.4bn quarterly loss could persuade founder Masayoshi Son to reconsider a management buyout of the technology conglomerate.
The private equity club: how corporate raiders became teams of rivals
The FT does a deep dive into private equity, detailing how the industry has transformed from a “dark art” into an “asset class” in which firms “nurture complex business relationships with their competitors.”
German leader probed over bank’s alleged tax fraud
Prosecutors are trawling through the emails of German leader Olaf Scholz as part of an investigation into whether he influenced a decision by Hamburg's finance authority in 2016 to waive a tax €50m demand against the MM Warburg bank. The Telegraph notes that MM Warburg made donations to the Hamburg SPD at the time to the tune of €40,000 (£33,000) and Johannes Kahrs, a colleague of Mr Scholz's in the Hamburg SPD, is known to have facilitated meetings between bank executives and Mr Scholz's closest advisors. “The whole thing stinks,” Thorsten Frei, a senior member of the centre-right CDU, told Bild newspaper.
Used cars sales fall by nearly a fifth
The number of used cars sold fell by 18% in the second quarter, figures from the Society of Motor Manufacturers and Traders show. Some 407,820 fewer vehicles changed hands compared with the same period last year.
Ferrovial considers options for its stake in Heathrow
Ferrovial is considering selling its 25% in London Heathrow with interest reportedly coming from private equity firm Ardian, which has held talks with its own advisers on a possible joint proposal with Saudi Arabia's Public Investment Fund. Shares in the Madrid-listed firm rose as much as 4.2% on the news. Meanwhile, Wizz Air is to restart flights to Moscow through its Abu Dhabi joint venture at the beginning of October.
Brits see price of airline tickets soar by a third
British travellers attempting summer getaways are being hammered with flight prices 30% higher than pre-pandemic levels, according to travel agency Kayak. Short-haul flights from UK airports saw the steepest increases, which come amid a wave of cancellations that have triggered huge demand for remaining seats.
Truss backs new powers to override City regulators
The Foreign Secretary has pledged to give ministers the power to override City regulators deemed to be holding back post-Brexit reforms. Liz Truss said she would press ahead with plans initially proposed by her Tory leadership rival Rishi Sunak, the former Chancellor and former City minister John Glen. Meanwhile, Legal & General chief Sir Nigel Wilson has said whichever candidate wins should get on with reforming Solvency II rules, which insurers say are holding back investment. Sir Nigel said: “It was the easiest of Brexit dividends and we still haven’t achieved it. Those who voted for this seemingly illusory Brexit dividend have yet to see anything. There is an urgent need for an investment-led recovery.”
Abrdn announces first half pre-tax loss of £320m
The investment group Abrdn has blamed market uncertainty for a £320m first-half loss, down from profits of £113m a year earlier. The firm also saw total net outflows of nearly £36bn, contributing to a 6% drop in assets under management to £508bn, compared with £542bn a year earlier. However, the Edinburgh-headquartered firm highlighted the positive performance of investment platform Interactive Investor, which it bought in a £1.5bn deal first announced in December. Shares in Abrdn were down 5.5% in afternoon trading, having plunged as much as 10% earlier in the day.
Rising rates and demand for bulk annuities boost L&G profits
Legal & General posted first-half profits of £1.2bn boosted by rising interest rates and strong demand for corporate pension deals. Higher interest rates mean the insurer has to set aside less capital now to make future pension payments. Profits were up from £1.1bn during the same period last year. Assets under management at L&G’s fund management arm totalled £1.3trn - a drop of 3% on the same period last year. Analysts at Bank of America said: “L&G is firing on all cylinders, with each business unit delivering impressive results.”
Coinbase posts loss as trading volumes tumble
Coinbase posted a $1.1bn loss in the three months to the end of June after a fall in trading volumes. The loss included $446m in non-cash impairment charges related to investments and ventures. Shares fell about 4% after close with Coinbase now down 65% so far this year.
LEISURE & HOSPITALITY
Domino's pulls out of Italy after seven years
Domino's Pizza has closed all its restaurants in Italy after local residents shunned the brand. The US chain had hoped to outcompete local rivals with its delivery service, but traditional pizzerias responded by ramping up their home deliveries or signing deals with platforms such as Deliveroo and Just Eat. The British arm of Domino's recently suffered a 16% fall in profits as it battled with the rising cost of ingredients.
IHG enjoys tourism rebound
A post-pandemic recovery in travel and tourism has boosted IHG, the owner of the Holiday Inn and Crowne Plaza hotel chains, which unveiled a $500m share buyback and resumed interim dividend payments after resurgent demand led to a 162% rise in half-year profits to $361m while revenues rose by 52% to $1.8bn.
IWG’s 22% revenue growth underwhelms investors
Serviced office provider IWG saw its forecasts slashed by analysts after the company failed to cut its losses by as much as hoped. IWG’s revenues in the first six months of 2022 climbed 22.3% to £1.45bn with the firm benefitting from the growing popularity of hybrid working, but its adjusted operating loss came in at £36m, higher than the £25m analysts had pencilled in.
BoE will probably need to raise rates again, Ramsden says
Bank of England Deputy Governor Dave Ramsden has said rates will probably have to rise again to tackle inflation pressures, although he also acknowledged financial market expectations that the recession forecast by the Bank could force it to reverse course on rates next year. In an interview with Reuters, Ramsden also said the BoE still intends to move Britain's economy off its massive stimulus programmes by starting to sell government bonds as soon as next month.
Retiring over-50s driving up inflation, John Lewis boss claims
The chairwoman of John Lewis, Dame Sharon White, told the BBC yesterday that an exodus of over-50s from the workforce since the pandemic has led to an increase in inflation and wage growth. It is also having major long-term implications for businesses struggling to fill jobs, Dame Sharon added. She said flexible retirement options or retraining over-50s for a different occupation could encourage some to return to work.
Zuckerberg’s metaverse a threat to the financial system, BoE warns
The Bank of England has warned that financial problems within a cryptoasset-linked virtual world such as Mark Zuckerberg’s metaverse could have severe real-world financial consequences. Researchers said cryptoassets could enable an open metaverse by allowing for digital items and money to work across different platforms. But an increased reliance on metaverse-based revenue streams by corporates could pose a material risk should there be volatility in crypto markets.