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Daily News Roundup: Wednesday, 31st January 2018

Posted: 31st January 2018

BANKING

Mortgage lending rises at CYBG, but slower growth ahead

The Clydesdale and Yorkshire Banking Group (CYBG) has warned that growth will slow due to competition in the sector, as it recorded an increase in first quarter mortgage lending. It said its mortgage book reached £23.9bn in the three months to the end of December, a 7.4% increase on an annual basis. David Duffy, chief executive of CYBG, commented: “We have delivered another solid quarter of growth, despite a competitive operating environment, seeing continued momentum in both mortgage and SME lending. While the economic outlook remains uncertain we remain focused on delivering sustainable and prudent growth and are confident we will deliver our guidance for 2018 and the medium term.”

Cut to cash machine fee

The Link cash machine network is to confirm that it will reduce fee operators' pay by 20% over four years, from 25p to 20p per withdrawal. Critics of the move have warned that 20,000 machines may close as a result, with elderly people and rural dwellers affected most. The company says that up to 2,300 free-to-use machines could close, but believes the actual number will be far lower. John Howells, chief executive of Link, commented: “If we do nothing, quiet ATMs in villages will get closed or surcharged. The only place we would have machines would be in very busy places such as city centres. Until the last vulnerable consumer is off cash, they need access to ATMs. How we pay for that is Link's job.”

Vlieghe gets second MPC term

Gertjan Vlieghe has been appointed for a second term as an external member of the Bank of England’s Monetary Policy Committee. He has formerly worked as a partner and senior economist at Brevan Howard Asset Management and as a bond strategist at Deutsche Bank.

Brexit report sinks bank stocks

A leaked report about the UK's economic prognosis post-Brexit led to a fall in banking stocks, with Barclays, Royal Bank of Scotland and Standard Chartered leading the decline. Standard Chartered was down 24.6p to 814.1p and Barclays down 5.9p at 201.75p.

PRIVATE EQUITY

Augmentum Capital to list fintech fund

Augmentum Capital is considering listing a fintech investment fund on public markets. It is believed to seek admission to London's main market and will look to raise up to £125m.

INTERNATIONAL

Deutsche Wealth seeks to expand in Asia

Deutsche Bank Wealth Management has announced plans to rebuild its Asia operation. Lok Yim, head of Asia Pacific wealth management at the bank, said further staff hires are expected to complement a recovery in assets that is outpacing the global trend.

Julius Baer’s new chief set to cement his authority at Swiss bank

Bernhard Hodler, the CEO of Julius Baer, is expected to tell investors today that he is planning more acquisitions at the Swiss private bank.

Irish central bank chief Lane nominated for ECB vice-president

Ireland has nominated Philip Lane to succeed Vítor Constâncio as it joins the race for the vice-presidency of the European Central Bank.

AUTOMOTIVE

Brexit leads to drop in car sales

Car production fell last year after a near 10% drop in domestic demand while investment by auto companies was more than £500m lower than in 2016, new figures from the Society of Motor Manufacturers and Traders reveal. Despite the decline, the 1.67m cars built in the UK was still the second-highest figure since the turn of the century. The SMMT said domestic demand for new cars was down amid falling economic confidence and uncertainty over Brexit.

AVIATION

Ryanair pilots win UK union recognition

Ryanair has agreed to recognise the British Airline Pilots' Association (Balpa) union to represent its 600 UK-based pilots in a bid to avert strikes over Christmas. Balpa general secretary Brian Strutton said the agreement was historic “given Ryanair's previous hostility towards unions.”

CONSTRUCTION

Housebuilders may lose planning permission on unused land

Housing secretary Sajid Javid has said that property developers and landowners should expect a “muscular” approach to increasing the supply of new homes, which would include greater use of compulsory purchase powers.

FINANCIAL SERVICES

Gender pay gap at Aviva

Aviva has said its average gender pay gap is 28.5%, with the gap in the value of bonuses at 57.2%. It is the first British financial services company to announce the disparity in pay for male and female staff, which, while larger than the national average of 1%, is lower than that for the financial sector.

Blackstone in talks to buy stake in Thomson Reuters unit

Thomson Reuters is in advanced talks with Blackstone to sell a stake in its financial and risk business, which accounted for more than 50% of its annual revenue in 2016.

HEALTHCARE

Corporate titans invest in healthcare

Shares in American health insurers have fallen after Amazon, JP Morgan and Berkshire Hathaway announced plans to create an independent company dealing in "technology solutions" intended to offer employees and their families "simplified, high-quality and transparent healthcare at a reasonable cost".

LEISURE AND HOSPITALITY

Sky Betting flotation rumour

Sky Betting and Gaming has not commented on reports that the company could be planning a flotation, after claims that owner CVC has hired Rothschild to examine a stock market listing.

REAL ESTATE

Homeowners warned over interest-only mortgages

The Financial Conduct Authority has advised one million people with interest-only mortgages to contact their banks, with fears that a market slowdown could result in them losing their homes. Jonathan Davidson, a senior director at the regulator, said: “If you convert to a repayment mortgage, you will see an immediate jump in the monthly payments, but it is better to make the move now than wait. If you convert today, you will pay less over the life of the loan, especially if interest rates do rise.”

Interest rate rise deters homebuyers

Approvals for home purchases fell from 64,712 in November to 61,039, far below forecasts of 63,500, Bank of England figures suggest. This comes after growth in house prices across the country weakens, and the Bank's decision to raise the base interest rate by a quarter of a percentage point to 0.5% last November.

Property prices fall by 4% in London

New research by Acadata suggests that London property prices are falling more steeply than at any time since the height of the financial crisis nearly a decade ago, with homes in the capital decreasing in value by an average of 4.1% in the year to November.

RETAIL

B and Q to cut head office jobs

B and Q has announced plans to cut 200 jobs at its head office in Chandler’s Ford, Hampshire as part of a cost-cutting drive. The retailer said that the cuts would help to “improve efficiency and simplify ways of working”. Helena Feltham, B and Q's human resources director, commented: “The new structure will improve efficiency, simplify ways of working, and reflect recent changes in the market and the number of B and Q stores.” She said the company wanted to make home improvement “accessible to everyone”.

ECONOMY

Carney calls for change to inflation index

Bank of England Governor Mark Carney has said the retail prices index of inflation used to set the interest rate on student loans, rail fares and on £400 billion of government debt has "known errors", and called for the government to do away with it. He commented that "most would acknowledge that RPI has no merits" and "it would be better not to further embed RPI in contracts".

Consumers feeling more confident

Surveys show that consumer confidence increased sharply in January, with the GfK consumer confidence rising four points from December and Lloyds Bank's business barometer showing that confidence among companies had risen by seven points to 35%. Hann-Ju Ho, senior economist for Lloyds Bank, commented: "Although business prospects have softened from last month's high, overall business confidence has started the year on a strong footing. The sharp increase in economic optimism signals that downside risks have eased and that the economy is likely to continue to expand in the first quarter this year."

Confidence low among Scottish companies

Bank of Scotland's Business Barometer reveals that Scottish business confidence is “low”, but that there is some potential for job creation. Jane Clark-Hutchison, regional director at Bank of Scotland, commented: “This latest reading of business confidence mirrors the findings of our most recent Business in Britain report for Scotland, where optimism levels were also low.”

OTHER

Bitcoin investors could unknowingly owe tax

HMRC has warned bitcoin investors who made huge gains when the cryptocurrency's value rocketed last year that they could unknowingly owe tax. Where bitcoin is held as an investment, any profit made by its disposal will be charged to capital gains tax, or if the person holding it is a company, corporation tax, HMRC said.

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