BANKING
Mortgage approvals jump
Mortgage approvals have reached levels close to those seen before the coronavirus pandemic, with 66,300 in July, up from 39,900 a month earlier. July’s total is the highest since February, where 73,700 were recorded, and close to July 2018’s total. In terms of value, mortgage approvals hit a record high of £16.7bn in July, a 64% month-on-month increase and 7.3% up on July 2019. Hugh Wade-Jones, the managing director of Enness Global Mortgages, said a surge in buyer demand seen once the market reopened following the coronavirus lockdown “has been seriously turbo-charged” by the stamp duty holiday announced by the Chancellor at the start of last month.
City expects most workers to stay at home
Major City companies say they are not expecting a rush to the Square Mile despite ministers urging people to get back to their desks. Financial institutions say they expect their London skyscrapers to stay largely empty this month as they go "slow and steady" on getting people back in. JPMorgan is preparing for around 30% of its 12,000 London workers to return next week, while Aviva is preparing for 10% of its 17,000 City staff to return to the office this month. Barclays and HSBC have already said that many staff won't be expected back in Canary Wharf before October, while Standard Life Aberdeen and NatWest have told workers to stay home until 2021. Schroders has told staff they will never again have to spend five days a week in the office.
Half of ATMs remain closed
Analysis shows that around half of the 7,200 cash machines closed at the beginning of lockdown remain out of service. Many are next to other ATMs and are closed to help with social distancing. John Howells, chief executive of Link, says that while there has been a fall in ATM usage of about 40% since last year, “cash is still vital for millions of people and one in three is still visiting a free cash machine every week.”
Online banking poses inheritance risk
Research by Direct Line Life Insurance suggests the rise in digital banking means growing numbers of bank and other financial accounts are being lost, putting inheritances at risk. Almost nine out of 10 probate lawyers say the rise in online banking has made it harder to track down people's accounts when they die, with lawyers struggling to find all the accounts tied to an estate in a quarter of cases over the last year.
Monzo announces changes
Monzo has announced changes to services that will be rolled out at the end of next month, introducing a £250 fee-free 30-day allowance for ATM withdrawals in the UK and European Economic Area. It has also confirmed a new fee for replacement cards, with a £5 charge for a new card unless the existing one expires or is stolen - or the holder is a victim of fraud. The bank says 79% of customers will not be affected by these changes.
RBS offers £100 new account bonus
Royal Bank of Scotland is offering £100 to customers who open a bank account. The offer is available to new and existing customers until November 19, with the hand out restricted to those who have not claimed a switching bonus since October 2017. To qualify, customers must pay in at least £1,500 each month, and log into online or mobile banking before December 30.
Santander extends branch opening hours
Santander, which has been operating with opening hours of 10am until 3pm due to the coronavirus pandemic, says branches will open from 9.30am until 4.30pm, Monday to Friday, as of September 7. Opening hours were 9.30am until 5pm before lockdown.
PRIVATE EQUITY
AA extends takeover deadline
Roadside recovery business the AA has given its private equity suitors more time to lodge takeover bids, with a deadline set out by the mergers and acquisitions regulator extended. Under Takeover Panel rules, bidders had until 5pm yesterday to make firm offers or walk away. The AA said the regulator has granted an extension to the deadline to September 29. Warburg Pincus, Platinum Equity Advisors and a consortium of Centerbridge Partners and Towerbrook Capital Partners are considering offers, with it reported that Warburg Pincus is considering whether to make a joint bid with Centerbridge and Towerbrook.
INTERNATIONAL
Deutsche Bank loses top European dealmaker to Citigroup
Citigroup has appointed Deutsche Bank dealmaker Robin Rousseau to its European investment banking team, where he will serve as vice-chairman.
AUTOMOTIVE
Tesla seeks to raise up to $5bn through share sale
Tesla has announced it will sell shares from “time to time” in a bid to raise as much as $5bn, with shares reaching record highs this year.
AVIATION
Wizz Air ‘parks planes’ to allay cash squeeze fears as quarantines bite
The UK’s second-biggest airline, Wizz Air, has announced that it will continue to fly at 60% capacity rather than 80% as previously declared, if ongoing travel restrictions remain in place.
CONSTRUCTION
British Land announces London office development
Property developer British Land has unveiled plans for a major new project in the City of London, with some 700,000 sq ft of offices included in proposals for 2 Finsbury Avenue near Liverpool Street station.
FINANCIAL SERVICES
Lloyds of London back in business
Lloyd’s of London has officially reopened after its headquarters underwent a five-month shutdown. CEO John Neal commented: “Throughout lockdown, the Lloyd’s market has continued to trade efficiently using digital platforms now embedded across our marketplace. This momentum has created an amazing opportunity for Lloyd’s to accelerate the implementation of digital enhancements and technology, including creating a virtual room that will enable brokers and underwriters to connect and collaborate online, alongside the physical trading environment.”
HEALTHCARE
Oxford Biomedica vaccine work with AstraZeneca sees shares rise
Gene and cell therapy firm Oxford Biomedica saw its shares rise on the news that AstraZeneca paid $15m upfront to reserve manufacturing capacity for mass production of its coronavirus vaccine candidate.
MANUFACTURING
Manufacturing expands
Output from Britain's manufacturing sector expanded at the fastest rate for more than six years last month, with the IHS Markit/Cips manufacturing purchasing managers' index registering a score of 55.2 in August. This is up from 53.3 in July on an index where a reading above 50 denotes expansion. Rob Dobson, director at IHS Markit, said: "The recovery of the UK manufacturing sector gathered pace in August. Output expanded at the fastest rate in over six years as new work intakes rose to the greatest extent since November 2017, led by an upturn in domestic demand and signs of recovering exports."
MEDIA AND ENTERTAINMENT
Bertelsmann joins race to acquire Simon & Schuster
Bertelsmann has announced it is a contender for acquiring ViacomCBS publishing arm Simon & Schuster, with chief executive and chairman Thomas Rabe stating that he is “interested” in the firm.
REAL ESTATE
CGT plans could deliver £27k hit for BTL landlords
Research by estate agent Hamptons International suggests that proposed changes to capital gains tax (CGT) could cost buy-to-let landlords up to £27,000 more for each property sold. With the Chancellor reportedly considering increasing the CGT rate from 28% to 40% for a higher-rate taxpayer and from 18% to 20% for a basic rate taxpayer, analysis suggests that lower-rate taxpayers will be worse off by an average £1,130 when selling up, while higher-rate payers will pay on average £6,800 more. Meanwhile, John Cronin, a banks analyst at Goodbody, said the mooted reform of CGT could shake up the housing industry by putting off part-time landlords and creating a gap that professional landlords could fill - inadvertently benefiting specialist lenders OneSavings Bank and Paragon Banking Group who “have a bias towards lending to professional landlords”.
RETAIL
Retail footfall jumps…
The last full week of the Eat Out to Help Out scheme has seen footfall across retail destinations in the UK increase by 6%. Footfall at shopping centres saw an increase of 9.1%, with 4.8% recorded on high streets and 5% at retail parks. Footfall in central London remains down 55.4%, with the rest of the UK’s cities reporting a 43.4% decline.
… while prices continue to fall
Figures show that that prices at retailers fell by a further 1.6% in August, after a 1.3% decline in July. The falls were particularly driven by non-food prices, which fell by 3.4% in August, as deflation accelerated from 2.9% in July. It was also revealed that fresh food inflation slowed down significantly in August, dropping to 0.2% growth from 0.9% in July.
Debenhams buyer deadline passes
A deadline for potential buyers for Debenhams to make offers has passed. With its administrator reported to be aiming for a sale of the business by the end of the month, advisers at Lazard, the investment bank running the sale process, informed interested suitors that they needed to submit bids by 5pm yesterday. The Times reports that if no buyer is found by the end of this month, the company will start exploring other options that could put 14,000 jobs in jeopardy, although it is understood that liquidation remains a last resort.
ECONOMY
BoE data fuels hope of V-shape recovery
Bank of England figures for July have raised hopes that the economy may be heading toward a V-shaped recovery, with borrowing on the up. July saw households borrow an extra £1.2bn in personal loans and credit card debt - more than the average £1.1bn seen in the 18 months to February. Credit card borrowing hit £622m during July, the highest rise in a single month since June 2018, while mortgage approvals rose 26,000 over the month to 66,300, with £2.7bn in new mortgage borrowing. The BoE report shows that lenders have put up the cost of consumer loans amid economic uncertainty driven by the coronavirus crisis, with the cost of new loans up by 0.22 percentage points to 4.64% in July and overdraft charges rising by 1.6 percentage points to 14.84%. The figures reveal that households saved an extra £7bn in July, an increase on the £5bn average seen pre-pandemic but down on the £19.1bn recorded at the peak of the crisis. Companies saved an extra £11.8bn during July as overall deposits rose by £26.3bn.