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Daily News Roundup: Wednesday, 12th October 2022

Posted: 12th October 2022


FCA updates guidance for banks on branch, ATM closures

The Financial Conduct Authority (FCA) has updated its guidance on how banks should approach branch and ATM closures. The regulator is now asking banks to assess what affect partial closures, such as removing counter services or permanently reducing opening hours, will have on customers and to put alternatives in place before changes are made. The conversion of free-to-use ATMs to pay-to-use ones is also included in the guidance. Sheldon Mills, executive director consumer and competition at the FCA, said: “The industry must make sure they are supporting people and businesses who rely on cash and banking services. That is why we've published updated guidance for banks that are considering branch closures and reminded them that we want alternatives, such as banking hubs, delivered quickly and as a priority.”

PSR confirms plans for new anti-fraud measures

The Payment Systems Regulator has confirmed plans to force banks to introduce new anti-fraud measures. The PSR said firms would be required to use the name-checking service, called "confirmation of payee", which helps to make sure payments are not sent to the wrong account by mistake, or to accounts run by fraudsters. Kate Fitzgerald, of the PSR, said: "Financial firms have to act to prevent fraud and confirmation of payee is one of the many tools that can be used. By giving this direction, we will see more widespread adoption of the protections available to people making payments.”


Ferrovial sells UK support services business Amey in £400m deal

Spanish infrastructure group Ferrovial has agreed to sell its UK services business Amey to buyout groups One Equity Partners and Buckthorn Partners in a £400m deal.


BoE will not extend emergency bond-buying programme

The Bank of England has confirmed that its bond-buying scheme to stabilise pension funds will end on Friday. The Pensions and Lifetime Savings Association, which represents schemes managing about £1.3tn of retirement money, had said many funds wanted the bond-buying programme to last until the chancellor delivered his economic plan on 31 October. But Andrew Bailey, the BoE Governor, told pension funds they had until the end of the week to shore up their portfolios against further shocks. Mr Bailey said: "My message to the funds involved and all the firms involved with those funds is: You've got three days left. You've got to get this done. Because again, part of the essence of a financial stability intervention is that it is clearly temporary." Meanwhile, insurers expect more UK companies to offload their pension schemes this year as the market turmoil surrounding surging government bond yields underlines the risks in managing retirement plans.

UK police record £36m fraud linked to Binance

UK investors lost £36m in fraud last year relating to the crypto firm Binance, data from City of London Police show. The figures reveal Binance-related theft accounted for 17% of the overall £204m of crypto fraud reported to police in 2021, which was almost double the previous year's figure. Separately, Crypto exchange Bittrex has agreed to pay $29m to settle enforcement cases with US authorities for “apparent violations” of sanctions against a host of countries, including Iran, Cuba and Syria.


Brits can now spread the cost of a Deliveroo using Klarna

Brits can now buy a Deliveroo takeaway using buy-now-pay-later firm Klarna - something experts describe as "extraordinarily irresponsible". Klarna does not charge interest, and there are no late fees to pay for delayed payments. But critics say BNPL can encourage shoppers to build up unaffordable debt, and that Klarna can pass arrears on to debt collectors.


The Sun faces fresh claims of phone hacking

Eight individuals who won claims against the News of the World for phone hacking are now bringing claims against the Sun, another newspaper in Rupert Murdock’s stable. Murdoch’s News Group Newspapers (NGN) always claimed illegal voicemail interception only took place at the now defunct News of the World newspaper, but in recent years the company has, without any admission of liability, reached financial settlements with three individuals who made specific claims that phone hacking took place at the Sun. The eight additional “Sun-only claims” working their way through the legal system are being led by actor Hugh Grant and come after more than 150 individuals launched new phone-hacking cases against NGN.


Robert Walters reports improved quarterly profit

Robert Walters, the British recruitment firm, on Tuesday reported a jump in its quarterly gross profit, supported by robust hiring as competition heats up to fill vacancies. Its gross profit rose to £112m for the quarter ended Sept. 30, compared with £91.8m a year earlier. Shares were up 5% on the news. In the UK, net income was down 6% year-on-year to £17.6m, compared to £18.7m in 2021, which was blamed on “more challenging market conditions across both technology recruitment and resource solutions.”


Mortgage rates rising four times faster than in 2009

New analysis shows that mortgage rates have increased at four times the fastest rate on record since Chancellor Kwasi Kwarteng's mini-Budget. According to Pantheon Macroeconomics, before this year, the biggest monthly increase in mortgage rates was 0.47 percentage points in June 2009. However, in the two-and-a-half weeks since the mini-Budget, the rise has been 1.8 percentage points. On the day of the mini-Budget on September 23, the average rate was 4.74%. This means that in two-and-a-half weeks, the cost of taking out a £200,000 loan has increased by £282 per month. Chris Sykes, of mortgage broker Private Finance, said that in some cases buyers have seen their quoted mortgage payments triple. He added: “The speed of change has been very shocking for a lot of people. The rapid rise definitely caused panic amongst many. It has had a significant impact on affordability for some.”


IMF admits Chancellor’s mini-Budget will boost the UK’s economic growth

The International Monetary Fund (IMF) has admitted that the Chancellor’s mini-Budget will boost the UK’s economic growth, with the country set to become the fastest growing G7 country this year. The IMF said the tax cuts announced by Kwasi Kwarteng are expected to lift growth even higher than its current forecast of 3.6%. However, the IMF warned that high inflation would persist at around 9% next year despite predictions of interest rates climbing to 5%. The IMF believes higher inflation and rising interest rates will push around 350,000 more people out of work in the UK, with the unemployment rate expected to rise to 4.8% by the end of 2023, from 3.5% today.

UK unemployment falls to lowest level since 1974

Unemployment in the UK hit a new multi-decade low in the three months to August, driven by long-term sickness among older people and by students choosing not to work. Figures from the Office for National Statistics show unemployment stood at 3.5% - 0.3 percentage points down on the quarter and the lowest since 1974. Kwasi Kwarteng, the Chancellor, said the 50-year low in the jobless rate showed that “the fundamentals of the UK economy remain resilient”. But analysts suspect the persistent pressure on wages will mean the Bank of England will find it harder to bring inflation down. Average pay, excluding bonuses, grew by 5.4% over the three months from June to August.

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