Monzo tops banking satisfaction rankings
Challenger bank Monzo has come out on top of a ranking that gauges whether customers would recommend their bank, with a satisfaction rating of 80%. Monzo had previously shared first place with Starling Bank but now leads the way, with Starling in second and First Direct in third. Virgin Money and Royal Bank of Scotland came in joint last, with both recommended by just 48% of their customers. The Competition and Markets Authority’s (CMA) current account satisfaction rankings are based on a survey conducted every six months that also looks at the quality of online and mobile provision; branch and overdraft services; and the quality of the relationship management for small businesses. Adam Land, senior director of remedies, business and financial analysis at the CMA, said: "How banks treat their customers can make an enormous difference to their daily lives, particularly when people and small businesses are feeling the pinch."
Banks reprimanded for potentially misleading customers
NatWest and the Co-Operative Bank have been reprimanded by the competition watchdog for potentially misleading customers about the quality of service they were receiving. The Competition and Markets Authority (CMA) found that both banks breached the Retail Banking Order by failing to fully inform customers about how their services and current accounts compared to rivals. The CMA said that the failure to publish service quality information in branches and on websites may have led customers to make decisions based on outdated or incorrect information.
Bank of Ireland warns of glitch
The Bank of Ireland has issued a warning after technical issues led to reports that people could withdraw large sums from cash machines despite having little or no funds in their accounts. The bank said it had been experiencing faults with its mobile app and warned customers that any withdrawal of funds over normal limits will be taken from accounts.
China's central bank lowers rates on standing lending facility
China's central bank, the People's Bank of China (PBOC), has lowered rates on its standing lending facility by 10 basis points. The overnight SLF rate has been reduced to 2.65%, the seven-day rate to 2.80%, and the one-month rate to 3.15%. This move comes after the PBOC unexpectedly cut key policy rates for the second time in three months, indicating efforts to boost the country's economic recovery.
Russian central bank raises rates to 12%
Russia's central bank has raised its key interest rate by 350 basis points to 12% in an emergency move to stabilise the weakening rouble. The rate hike comes after the rouble plummeted past the 100 threshold against the dollar, impacted by Western sanctions and increased military spending. The decision aims to limit price stability risks as inflationary pressure builds up. This is the first emergency rate hike since February 2022, when the central bank raised rates to 20% after Russia dispatched troops to Ukraine.
US regulators try to consign emergency bank fire sales to history
US regulators including the Federal Reserve and Federal Deposit Insurance Corporation are proposing that large regional banks create "living wills" to facilitate the winding down of troubled institutions and prevent emergency fire sales.
SEC lawyers subpoena fund managers over ESG disclosures
The US Securities and Exchange Commission's enforcement division has sent document requests, including subpoenas, to asset managers regarding an ongoing investigation into environmental, social and governance investment marketing.
UBS and Credit Suisse banned from disposing of shares in Russian subsidiaries
A Moscow court has banned UBS and its recently-acquired Swiss rival Credit Suisse from disposing of shares in their Russian subsidiaries, court documents showed. This came after a request from Zenit Bank, which is concerned about losing out if they exit Russia. Zenit told the court in a statement that it believed the Russian subsidiaries of UBS and Credit Suisse were preparing to terminate their activities in the country.
Danske dashes ahead of other banks with climate action policy
Danske Bank has become the only major bank to rule out loan and underwriting deals with energy groups expanding oil and gas production.
FCA: One in 10 interest-only mortgage holders may be ‘overly optimistic’ on debt
The Financial Conduct Authority (FCA) has warned that one in 10 interest-only mortgage holders might be “overly optimistic” about paying off their debt. Research commissioned by the regulator shows that 82% of borrowers are confident that they could repay what is left on their loan at the end of the mortgage term. However, the FCA said research suggests this “may be overly optimistic,” noting that while 36% of borrowers expected some shortfall, modelling suggests this could be closer to 46%. Analysis by the watchdog shows that there were 774,000 purely interest-only mortgages at the end of June last year, as well as 240,000 part interest-only mortgages. These account for 8.8% and 2.9% of regulated mortgages, respectively. The FCA notes that the number of interest-only mortgages is now around half of that recorded in 2015.
Regulators concerned over finfluencers
A survey by Hargreaves Lansdown shows that 21% of investors aged 18 to 34 get their stock tips from Instagram. This is followed by 16% from Facebook, 14% from Reddit, and 8% from TikTok. The rise of "finfluencers" on social media, who promote financial products or services, has been a concern for regulators. Emma Wall at Hargreaves Lansdown advises caution when taking tips from unregulated or unverified sources such as social media. Instagram has implemented policies to curb fraud and deception and requires financial services advertisers targeting UK users to be authorised by the FCA.
Supermarket inflation slows again
Supermarket inflation has slowed for the fifth month in a row, with grocery price growth falling to 12.7% in the four weeks to August 6. This marked a month-on-month decline of 2.2 percentage points. This comes on the back of price drops on staples including milk, pasta, bread and cooking oils, with a four-pint carton of milk down around 19p to £1.50. Retailers have been under pressure to ensure falling ingredient costs filter through to supermarket shelves. While a Competition and Markets Authority review into possible profiteering found no evidence of retailers doing so, the watchdog urged supermarkets to lower prices where they could afford to.
Wage increases hit a new high while unemployment rises to 4.2%
Office for National Statistics (ONS) data shows that wage increases in the UK have reached a new record high, climbing by 7.8% between April and June, up from 7.5% in the March to May quarter. The increase means regular pay growth almost matching inflation, which currently stands at 7.9%. Total pay, including bonuses, rose by 8.2% a year in the three months to June. The ONS data means the Bank of England could be more likely to hike interest rates from 5.25% to 5.5% in September. CMC Markets analyst Michael Hewson says the numbers “have not just given the central bank a headache, but a migraine,” while analysts at Capital Economics now expect the Bank to deliver “one more 25 basis point rate hike before it brings its tightening cycle to a close.” Separate ONS figures show that unemployment increased from 3.9% to 4.2% in the three months to June. The number of employees on the payroll increased by 97,000 to 30.2m in July, while job vacancies fell by 66,000 and now stand at around 1.02m. The number of workers on zero-hours contracts in the three months to the end of June increased to 3.6% of the workforce, up from 3.4% in the previous three months.
PM sees ‘light at the end of the tunnel’ on inflation
Rishi Sunak says there is "light at the end of the tunnel" for the Government's plan to halve inflation. Arguing that the “best way to be able to bring interest rates down and stop them going up is to bring inflation down," the Prime Minister insisted that ministers are “making progress” and said it is “important that we stick to the plan.” “The plan is working. I think there is light at the end of the tunnel," he added.
More than 3.5m people lose millionaire status
Private wealth has taken a hit from soaring inflation and a collapse in global currencies, with more than 3.5m people losing their millionaire status last year. Analysis by UBS and Credit Suisse shows that the number of people with assets totalling $1m fell from 62.9m to 59.4m during 2022. Britain saw the third largest fall, with the number of millionaires dropping by 440,000 to 2.6m. The report shows that private wealth fell 2.4% to $454.4trn at the end of 2022, with $11.3trn wiped off the value of personal assets. Despite a decline in 2022, UBS and Credit Suisse expect global wealth to rise by 38% to $629trn by 2027, while the number of millionaires will increase to 86m during the five-year period. Separate research for the Bloomberg billionaires index found that the richest 500 people in the world lost a total of $1.4trn in 2022.