Banks moving away from traditional branches
The Mail’s Amelia Murray looks at changes that suggest “the days of the traditional bank branch are numbered”, with staff increasingly replaced by machines and banks “turning their backs on the traditional branch”. She cites analysis showing that the UK’s banks have axed 2,766 branches in five years, highlighting that Barclays and HSBC, which have more than 32m UK customers between them, are closing counters. Ms Murray points to a Mail survey which reveals that almost one-in-five customers has been turned away when trying to use a counter, noting that while banks say they are responding to customer demands, almost half of the 1,027 adults polled by Consumer Intelligence said they prefer a face-to-face service. When quizzed on their policies, Lloyds, NatWest and Nationwide say staff may let customers know a self-service option is available but insist customers can always use the counter service if preferred. Santander asks customers what they want to do in the branch, TSB says it does not direct customers to use its machines, while Barclays says the machines allow branch staff to help a greater number of customers more effectively.
Savings of £1trn sit in accounts paying next to no interest
Analysis shows that savers with the UK’s biggest banks hold £866bn in easy-access accounts which pay very little interest, with this an increase of £179bn since the start of the pandemic. Customers keep a further £250bn in current accounts which pay no interest — a rise of £59bn. The report shows that easy-access accounts with banks such as Barclays, HSBC, Lloyds, NatWest, Santander and TSB typically pay just 0.01% interest, while other providers now pay as much as 0.67%. Anna Bowes from Savings Champion says big banks “are renowned for not passing on any base rate rise in full. Even if they were to, you would still lose out because they pay such low rates.” Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, says: “If you are lucky enough to have been building up savings during the pandemic, you need to switch it from your current account to protect it.”
Banks target first-timers with reduced rates
Banks are offering younger borrowers cheaper mortgages while raising rates for other borrowers, with brokers saying lenders have become less cautious about taking on these borrowers. Aaron Strutt of mortgage broker Trinity Financial said: "The market tends to slow down the closer we get to Christmas, and lenders want to keep it moving, especially for first-time buyers, who are the lifeblood of the market. The best way to do that is to lower prices.” The average two-year fixed rate for borrowers with a 5% deposit has fallen by 0.08 percentage points since the start of the month, according to Moneyfacts, while the average 10% deposit mortgage fixed for two years is 0.06 percentage points lower. Halifax has cut rates for borrowers with a 10% deposit by 0.15 percentage points, while Accord Mortgages and Platform, which is part of the Cooperative Bank, this week reduced rates on certain deals.
Regulators propose global climate change blueprint for banks
Global regulators say banks should embed controls over financial risks from climate change into their boards and assess the adequacy of their capital buffers. Regulatory principles on climate change put out to public consultation by the Basel Committee on Banking Supervision say banks should “identify and quantify climate-related financial risks and incorporate those assessed as material over relevant time horizons into their internal capital and liquidity adequacy assessment processes.”
JPMorgan sues Tesla for £120m
JPMorgan is suing Tesla over claims it “flagrantly” breached a contract. The bank bought warrants - contracts to buy shares at a specific price - from the carmaker in 2014 but says the firm did not fully honour the agreement and owes it a shortfall of £120m.
LV condemns Royal London’s takeover intervention
LV has rejected fresh overtures from rival insurer Royal London and called on members to back a planned takeover by the US private equity firm Bain Capital. LV accused Royal London of throwing a "hand grenade" to try to disrupt its planned £530m sale to Bain, which would see LV lose its mutual status. Royal London says it could keep LV as a mutual, but LV says Royal London wants to dismantle the business. LV chairman Alan Cook said: “Despite having every opportunity, Royal London failed to submit a superior best and final offer, and therefore the board unanimously concluded that the better value, certainty, investment and structure of Bain Capital’s proposal would be in the best interests of our members.” However, Ros Altmann, former Pensions Minister, comments: “It is very difficult to see how customers can expect to benefit from this deal.”
Scottish Widows to invest £25bn in green companies
Scottish Widows plans to invest up to £25bn by 2025 in companies which are proactively tackling climate change. The firm said at least £1m would be invested in firms developing climate solutions, such as alternative green energy, sustainable agriculture, and pollution prevention. Scottish Widows has already targeted halving the carbon footprint of its investment portfolios by 2030, and aims to reach net zero across the entirety of its investments by 2050.
Reeves: Labour committed to post-Brexit equivalence for the City
Shadow Chancellor Rachel Reeves says a Labour Government would seek to secure a post-Brexit equivalence deal for the financial services sector, telling TheCityUK’s national conference that, if elected, Labour will “fix some of the holes in the patchwork Brexit deal with the EU”. Saying that the party wants to ensure the UK has “the widest possible agreement” on equivalence, Ms Reeves said the current government “hung financial services out to dry during Brexit negotiations.”
LEISURE & HOSPITALITY
Yo! Sushi owner exploring sale alongside IPO
Mayfair Equity Partners-backed Snowfox Group, which owns the Yo! Sushi restaurant chain, is launching negotiations with potential buyers following a string of takeover approaches for the business. Snowfox has instructed its advisers to canvas interest from bidders, with any deal expected to value the company at around £750m. Meanwhile, advisers are also working on a possible IPO of the group, which would take place in 2022.
Government orders competition probe over Arm buyout
Digital Secretary Nadine Dorries has ordered an in-depth probe into the $40bn planned takeover of the UK's Arm Holdings by American firm Nvidia - on both national security and competition grounds. Japanese conglomerate Softbank last year agreed to sell the semiconductor design company to Nvidia but an initial investigation by the Competition and Markets Authority earlier this year reported that the deal could weaken rivals and stifle innovation.
MEDIA & ENTERTAINMENT
Film and TV sector surges amid streaming demand
Research show that the UK’s 50 leading film and TV companies have seen their turnover rise by 15.4% in the last year, hitting £8.1bn as demand for content from streaming platforms continues to drive growth.
Sainsbury's and Amazon partner on cashierless store
Sainsbury's has partnered with Amazon to trial a "just walk out" cashierless store. The test store, in Holborn, central London, is currently open only to Sainsbury's staff and is expected to open on November 29. The Sainsbury's Smartshop Pick & Go store uses the same technology as the six Amazon Fresh stores in the UK. The partnership marks the first time Amazon has allowed a UK retailer to use its technology.
Derby hit by new nine-point deduction
Derby County have accepted a total deduction of 21 points for financial breaches, with administrators having agreed a new nine-point deduction, plus an additional suspended three points. The club have also agreed a business plan including restrictions on spending, transfers and losses. The club was given a 12-point penalty after entering administration in September, with a second penalty after breaching the English Football League’s profitability and sustainability rules.
Tax debts hit £42bn, with HMRC owed by 2.4m more people
Data from the National Audit Office (NAO) shows that the UK's tax debt burden jumped from £16bn to £42bn between January 2020 and September 2021, with up to 2.4m more taxpayers having fallen into debt to HMRC. The analysis shows that as of September 30, 6.2m taxpayers owed money to HMRC compared to 3.8m on January 31, 2020, with the average amount taxpayers owe now at £6,800, a 60% increase. The tax office paused most debt collection activity as Britain went into lockdown in March 2020, while payments of VAT and self-assessment income tax were also deferred. The tax authority has forecast that it will have twice the usual level of debt to manage at the end of March 2022, predicting that total tax debt will be around £33bn.
Inflation expected to have hit 4% in October
Simon English in the Evening Standard looks ahead to inflation figures set to be released today, saying the City expects the rate to have increased from 3.1% in September to 4% in October – double the Bank of England’s 2% target. On how high the rate could potentially climb, he points to climbing energy prices and a “cost-of-living squeeze”, noting a Capital Economics forecast that inflation could hit 5% by April 2022. Mr English says that the Bank “still thinks inflation will pass” and notes that officials last week opted to hold interest rates at 0.1%. Some commentators, he suggests, “will see rising inflation as a sign that the Bank has got it wrong” in holding rates at a record low.
Jobs data could prompt rate rise
With the unemployment rate falling and a data showing a record high for job vacancies, BBC News suggests this increases the likelihood that the Bank of England will raise interest rates from record lows before the end of the year, with officials expected to take steps designed to ease inflation. Paul Dales, chief UK economist at Capital Economics, said: "If the next labour market release on December 14 tells a similar story, we think that will be enough to prompt the Bank to raise interest rates from 0.10% to 0.25% at the meeting on December 16."
HMRC intensifies efforts to claw back pandemic payouts
HMRC has ramped up efforts to recoup £1bn from fraudulent or incorrect furlough pay-outs, with more than 26,500 investigations into potentially fraudulent pandemic support claims launched over the past eight months. The probes also cover the income support scheme for the self-employed and the "eat out to help out" initiative. With HMRC having planned to target about 30,000 cases over a three-year period, the Guardian’s Richard Partington says the fact that officials have already opened nearly as many cases this year suggests the total is likely to be much higher than originally anticipated.