BANKING
'Jury still out' on loss of City banking jobs to EU
Speaking in front of a House of Lords committee, Nathanael Benjamin, the Bank of England's executive director for authorisations, said the European Central Bank has so far made no attempt to move a large number of bankers from London to EU hubs. He added that the ECB "have engaged well with us" on its review and have "indicated that they would not want to do anything that hinders some prudential outcomes". Sam Woods, a deputy governor who leads the Bank's Prudential Regulation Authority arm, cautioned that the "jury is still out" on the number of City of London banking jobs that may ultimately be lost to the EU following Brexit.
Britcoin will not be rolled out until 2025
Shiv Chowla, the senior manager for central bank digital currencies at the Bank of England has said a UK CBDC, dubbed Britcoin, will not be rolled out until 2025 at the earliest. “We have publicly committed to alongside agency to launch a consultation sometime in 2022 on our assessment of the case for a CBDC in the UK and the merits of further work to develop an operational technology,” said Chowla, speaking at a London crypto conference. “Any such phase will take several years and of course, evolve more in depth work and testing about the technical feasibility… The earliest stage for a CBDC will be in the second half of this decade,” he confirmed.
NatWest to launch BNPL product
NatWest is planning to launch a buy now, pay later (BNPL) product this summer, which will give its customers the convenience to make a purchase almost anywhere that accepts Mastercard. The bank said it will put safeguards in place to help ensure lending is affordable. The lender said that the new proposition will offer clear, structured repayments, credit scoring and affordability checks.
PRIVATE EQUITY
Prologis launches bid to acquire Blackstone’s warehouse portfolio
Prologis is looking to acquire the €21bn warehouse portfolio of investment giant Blackstone, as firms scramble to boost logistics capacity and investment continues to pour into the sector. Prologis has made a non-binding offer for Blackstone’s 2000-strong European warehouse portfolio, Mileway, which the firm has been building up via acquisitions for the last six years. Bosses at Prologis now have around six weeks to finalise a bid, it has been reported.
INTERNATIONAL
SNB spent $22.5bn on forex interventions in 2021
The Swiss National Bank (SNB) has revealed it spent SFr21.1bn ($22.52bn) on foreign currency interventions during 2021 - down from the SFr110bn it spent in 2020. “In addition to the negative interest on SNB sight deposits, foreign exchange market interventions continued to be an important instrument for the SNB in 2021 to ensure appropriate monetary conditions,” the SNB said. “Compared to 2020, however, the SNB saw itself required to intervene less often and to a significantly lesser extent,” it added.
BNP to end all Russian banking business
BNP Paribas has announced that it is to sever all ties with corporate clients in Russia. The French bank said it was now informing Russian businesses that it would “no longer be able to process their transactions from the end of March onwards”. BNP’s total gross exposure to Russia amounted to about €1.3bn at the end of December. Credit Agricole also said on Tuesday it had suspended all services in Russia.
Withdrawals and transfers in EU become more expensive for Brits
EU-based banks are starting to ramp up fees for transfers to and from the UK, as well as ATM withdrawals across the EU from UK-issued or registered bank cards. Crédit Agricole has introduced a €5 charge for withdrawals and an €18 flat fee on any bank transfers coming from Britain. Brexit means the SEPA rule that EU-wide charges cannot be higher than costs for domestic transfers no longer applies to Britain.
FINANCIAL SERVICES
Bank of England warns of staff shortages as it takes on post-Brexit powers
With the labour market remaining tight for financial services, the BoE faces challenges in hiring the people it needs to help with writing financial rules that used to be drawn up in Brussels.
MANUFACTURING
Record share of UK manufacturers expect to raise prices
A survey by the CBI has found that the proportion of manufacturers in the UK expecting to raise prices over the next three months hit its highest since records began in 1975. A net balance of 80% of manufacturers in March had raised prices for domestic orders booked over the next three months, up from 77% in February, according to the CBI. The survey of 229 manufacturers, conducted between February 24 and March 14, also showed a joint record share of manufacturers reported higher order books this month, with the net balance matching November's all-time high of +26%.
US rolls back tariffs on UK steel
Business groups have welcomed a move by the US to remove tariffs on UK steel and aluminium shipments. However, the tariffs will be replaced with a quota system which means the UK can ship the metals duty-free so long as they don’t exceed 2019 levels. In exchange, the UK will suspend extra import taxes it had put on US products such as bourbon and Levi's jeans. International Trade Secretary Anne-Marie Trevelyan said the agreement “means our manufacturers can now enjoy a high level of tariff-free access to the US market once again.”
REAL ESTATE
Property transactions climb above 96k
Property transactions reached 96,250 in February, with higher value buying at pre-pandemic levels. Transactions were up 15% last month, compared to 83,450 in January, according to HMRC’s latest data. Total sales for the first two months of the year stand at 179,900, some 18% lower than last year. However, this is still the next highest level since 2007.
RETAIL
Kingfisher reports record profits
Kingfisher has reported a 33.1% rise in pre-tax profits to a record £1bn for the year to January 31, up from £756m, as sales rose almost 7% to £13.2bn, after a renewed enthusiasm for DIY during the pandemic. It means the company becomes only the third British retailer in history to reach the £1bn mark, following in the footsteps of Tesco and Marks & Spencer.
ECONOMY
Strong tax receipts and fall in borrowing aid Chancellor
Official data reveals that borrowing in the first 11 months of the financial year was lower than the Office for Budget Responsibility forecast at the time of the October Budget. The Office for National Statistics said that government borrowing in the financial year to February was £138.4bn. With strong tax receipts in February combined with March borrowing - expected to be about £15bn - the total deficit for the year is now likely to be approximately £153bn, about £30bn lower than forecast. Although some observers say the figures give Sunak more room to manoeuvre, soaring debt interest payments linked to inflation, which is expected to stay high for months, will limit any wiggle room the Chancellor has gained.
OTHER
£20 and £50 paper banknotes will cease to be legal tender this year
The Bank of England has warned that £19bn worth of paper notes currently in circulation will cease to be legal tender after September. Polymer plastic notes, which the UK has already introduced, are already the only legal tender for £5 and £10, and this will soon include £20 and £50 notes.