BANKING
March sees record mortgage borrowing
Bank of England (BoE) figures show that UK homeowners borrowed a record £11.8bn more on mortgages than they repaid in March, with market activity driven by the stamp duty holiday and low mortgage rates. Gross mortgage borrowing hit £35.6bn in March, with buyers looking to tie up property purchases ahead of the end of the stamp duty holiday, a tax break that was extended in the recent Budget. Although the number of new mortgage approvals dropped from 87,000 to 83,000 in March, they remained higher than the 73,000 recorded in February 2020 – the last month before the UK rolled out pandemic-related restrictions. Andrew Montlake of mortgage broker Coreco said stamp duty relief was having an "insane effect" on the property market, saying that March’s mortgage data highlights a “frenzied rush” of people looking to buy in the second half of last year and benefit from the holiday on the levy. Meanwhile, the BoE said deposits into accounts "remained strong” in March, with £16.2bn more deposited than withdrawn – exceeding the £4.7bn monthly average for the year to February 2020. The report also reveals a net consumer credit repayment of £535m, including people's borrowing using credit cards, personal loans and overdrafts.
Banks should have 'duty of care' to prevent fraud
Banks should be under a legal obligation to prevent fraud as part of an extension of duty of care laws, a crime commission has concluded. The commission, set up by the Police Foundation, cited the Government's proposed statutory duty of care on social media firms requiring them to protect children from online harms, saying: “It is worth considering whether this duty of care ought to be extended beyond the social media companies to other industries, for example financial services, to prevent fraud and other forms of economic crime.”
Savers missing out on £1bn in interest
Savers are missing out on up to £1bn interest a year by leaving cash in current accounts, with accidental savers driving up the amount in accounts by nearly 30% amid the pandemic. By comparison, just 18% extra went into easy-access savings accounts. Bank of England data shows there is now £235.5bn in current accounts paying no interest. Data analysed by Paragon Bank show that easy access accounts account for some 58.7% of the savings market - excluding current accounts - an increase from 55.6% last January. This comes despite low savings rates as the central bank holds the base rate at 0.1%. Moneyfacts analysis shows that consumers appear to be happy to keep their money in accounts that pay very little, while a study from Wealthify has found that 43% of consumers are satisfied with how their cash savings perform.
Green loans grow
Analysis by Mortgages for Business shows there are currently 26 green mortgages available to borrowers, with these promising lower rates to those whose homes have good energy efficiency ratings. Just 18 months ago there were no home loans that offered borrowers a discount for improving their home’s carbon footprint.
Voice tech stops fraud
HSBC says voice recognition technology linking callers’ speech patterns to recordings of customers has stopped £249m getting into the hands of criminals in the past year. The lender’s Kerri-Anne Mills said: "Voice ID has been instrumental in stopping attempts at telephone banking fraud. We've seen a 50% drop in reported telephone banking fraud year-on-year."
INTERNATIONAL
Horta-Osorio snaps ups Credit Suisse shares
New Credit Suisse chairman Antonio Horta-Osorio, who joined from Lloyds last week, has snapped up £871,000 worth of stock in the lender, buying 114,300 shares. The Telegraph says the purchase is a “display of confidence in his own attempts to turn the embattled lender around.”
BoA and JPM announce Libor replacement trade
Bank of America and JPMorgan Chase have entered into a $250m one-year basis swap with one side tied to the Bloomberg Short Term Bank Yield index.
Bank of America confirms French appointment
Bank of America has hired Citigroup’s Emmanuel Regniez to lead its investment banking franchise for France. The firm is reinforcing its European network in the wake of Britain’s departure from the EU.
AVIATION
Call to open up US-UK air travel market
A number of travel, airline, union, business and airport groups across the UK and US are calling for air routes between the two countries to fully reopen. They argue that safely reopening borders between the US and UK is essential for both countries’ economic recovery from the pandemic. This comes after the EU's executive recommended loosening travel restrictions next month to allow foreign travellers easier access to the bloc.
FINANCIAL SERVICES
FCA tells providers to book savers pension guidance
New rules proposed by the Financial Conduct Authority (FCA) would see providers having to book Pension Wise appointments for clients looking to access their defined contribution pensions. The watchdog said this would encourage savers to take the right guidance to help them make informed decisions. While providers are required to encourage consumers to seek appropriate advice on pensions, take up of Pension Wise guidance remains low. Under plans set out in a consultation paper, the FCA said consumers should be referred to Pension Wise guidance, with the provider offering to book them an appointment. They would also have to document whether the saver took up or declined the offer of guidance or went on to receive regulated advice.
Plus500 sees revolt over CFO bonus
Investors in online trading company Plus500 have rebelled over its plans to hand its chief financial officer a one-off bonus, with almost 45% of those who voted at the annual meeting opposed the plan to hand Elad Even-Chen almost £1m for his work in cutting the company’s tax bill. More than 41% of shareholders also rejected the group’s remuneration report.
Glen lauds City’s resilience
John Glen, the City of London Minister, has trumpeted the City’s ability to adapt post-Brexit saying there had only been a modest amount of job losses since the 2016 EU referendum. Estimates suggest that around 7,500 jobs and £1.2trn in assets have left the City and gone to other parts of Europe as a consequence of Brexit – far less than the 75,000-200,000 job losses predicted by some pundits.
Families ill-prepared for inheritance issues
A Hargreaves Lansdown study has found that many families are ill-prepared for inheritance issues. According to the research, only 42% of people are certain their parents have a will, while only one in five (17%) say their parents have a lasting power of attorney in place. The research also found that only 9% of people have a register of assets to make it easier for those they leave behind to untangle their finances and a third of people who know their parents have a will, do not know where it is located.
‘Multi-jobbers losing millions in pension contributions’
Research from Scottish Widows has found that nearly 1m low earners with multiple jobs are missing out on £76m a year in employer payments towards their retirement funds.
MANUFACTURING
Manufacturing expands rapidly in April
IHS Markit’s purchasing managers’ index (PMI) for manufacturing activity shows that the sector expanded at its fastest pace in almost 27 years in April, with demand surging ahead of lockdown measures easing. The index rose from 58.9 to 60.9 last month, its highest reading since July 1994. IHS Markit said: “The sector remained beset by supply-chain delays and input shortages ... which contributed to increased purchasing costs and record selling price inflation”. Despite the record increase, UK manufacturers are underperforming compared with their European peers, due to Brexit, with the eurozone PMI coming in at 62.9. This marks the fourth consecutive month that Europe outperformed the UK.
PROFESSIONAL SERVICES
Corporate job hunts increase
Staff in corporates, consultancies and start-ups are increasingly seeking new jobs, according to figures from Movemeon. A third of those working in management consultancies are looking for a new role, alongside nearly a quarter of those in private equity and venture capital. Movemeon’s 2021 Work and Pay Report shows that around a fifth of corporates, consultancies and start-ups have taken government support. It was also shown that nearly half have given salary increases to employees.
REAL ESTATE
‘Need to buy’ will support UK housing market, says Keepmoat
Tim Beale, CEO of housebuilder Keepmoat, says the pandemic has seen many people re-evaluating their housing requirements, with the shift in priorities likely to sustain the thriving property market for several years.
RETAIL
High street footfall figures down
Figures from retail insight firm Springboard reveal that high street footfall was down 6.1% last week from the week before. The firm’s insights director Diana Wehrle commented: “Footfall across UK retail destinations dipped a little last week from the week before, driven by fewer shoppers visiting high streets whilst in retail parks and shopping centres customer activity rose.”
SPORT
Dimon: We failed to take fans into account
Jamie Dimon, the boss of JPMorgan, has admitted that the bank failed to take into account the passion of football fans when backing divisive plans for the breakaway European Super League.
ECONOMY
Experts: Bank must address risk of inflation
The Times’ shadow monetary policy committee - a group of former Bank rate-setters, Treasury officials and economists – has urged the Bank of England to leave rates and quantitative easing (QE) unchanged this month but to address the mounting risk of inflation and prepare to reduce QE. A majority of the group said that the Bank should address concerns about inflation by making it clear that tapering would begin shortly, while four members of the nine-strong panel said the Bank should let the £20bn of corporate bonds it has bought through QE run off.