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Daily News Roundup: Wednesday, 8th September 2021

Posted: 8th September 2021

BANKING

£32m of fraud prevented in first half of 2021

More than £32m of fraud has been prevented by the finance industry and the police through the Banking Protocol scheme in the first half of 2021, new UK Finance figures have revealed. This figure is up 65% compared to the same period last year and brings the total amount of fraud prevented to £174m since the scheme was introduced in 2016. Meanwhile, nearly three-quarters of authorised fraud and scam complaints handled by the Financial Ombudsman are now won by customers - with banks forced to pay out more than £130m in the past three years. But campaigners say banks should now stop fighting blameless victims and instead focus on improving security to prevent fraud in the first place. Martyn James, of complaints website Resolver, says: “The banks should not be tying up the Ombudsman's time with these cases, nor leaving customers in limbo when they know full well they will be upheld.”

INTERNATIONAL

Brussels to issue ‘Covid green bonds’ as part of pandemic recovery effort

The European Commission will issue the first of an expected €250bn of EU green bonds in October, making the EU the largest green bond issuer in the world.

AUTOMOTIVE

Toyota to spend $13.6bn on battery development in effort to win electric battle

Toyota is to spend 1.5trn yen (£10bn) on developing electric car batteries and manufacturing plants over the next decade. The company also said it remained on track to develop next generation solid-state batteries by 2025.

Hyundai targets hydrogen fuel cells in all commercial vehicles by 2028

Hyundai Motor Group is ramping up its shift from petrol engines to batteries and hydrogen power with a commitment to power all its commercial vehicle models with fuel cell systems by 2028.

Apple Car executive defects to Ford in blow to automotive ambitions

Apple executive Doug Field has been hired by Ford to lead development of the automaker’s next generation of tech-enabled vehicles. The FT says this could spell the end of the Apple Car project.

AVIATION

BA warns it could sell Gatwick slots if deal with unions collapses

British Airways could sell its landing slots for short-haul flights from Gatwick unless unions agree to a new lower-cost subsidiary at the airport, the airline has warned. CEO Sean Doyle said that BA wanted to set up a unit with a “competitive cost platform” but if negotiations with unions failed, it would be unable to compete at the Crawley airport, where it has lost money for decades.

CONSTRUCTION

Vistry says keeping up with demand is ‘bloody hard work’

FTSE 250 builder Vistry said on Tuesday that half-year results show a swing to a statutory pre-tax profit of £156.2m, compared to a loss of £12.2m in the same period last year. But supply chain issues meant it was “bloody hard work” getting materials on site, COO Graham Prothero said. With a shortage of skilled labourers adding to construction woes, CEO George Fitzgerald said: “House prices and the shortage of affordable housing in the country are only going to go one way because we’re just not going to be able to meet demand.”

FINANCIAL SERVICES

Dividend raid a fresh threat to the City

Economists and business leaders have warned that Boris Johnson’s £600m tax raid on dividends risks damaging the City of London, deterring investors and punishing entrepreneurs. The tax on dividend income will rise from 7.5% to 8.75% next April, alongside the hikes in NICs. The Telegraph suggests the dividend tax burden will encourage companies to list abroad rather than floating in Britain, as well as potentially depressing share prices by making stocks a less attractive source of income for savers. Lord Myners, a former City minister under Gordon Brown, said: "I would have expected this from a Labour government, but never a Tory one."

Remote working leaves traders taking fewer risks

Traders are taking fewer risks when working from home, according to TP Icap, which pointed to anecdotal evidence indicating they were shying away from complicated transactions involving multiple parties, because of worries that a poor internet connection at home could interrupt audit trails that record deals. “You’re at risk in anything that’s high velocity of there being a breakdown,” Robin Stewart, TP Icap’s finance chief, said. “You could misreport it because your internet might go down.”

Cinven set to acquire True Potential

Cinven is close to wrapping up a takeover of True Potential, a wealth management platform which works with a fifth of Britain's army of financial advisers. City sources said the takeover was likely to value the business at anywhere between £1.6bn and £2bn. Last year, True Potential reported turnover of £185m and earnings before interest, tax, depreciation and amortisation of £74m, up 59% on the previous year.

Zurich Insurance joins corporate squeeze on air travel to cut emissions

Zurich has promised to cut emissions generated from flights for employees to 70% below pre-pandemic levels. The insurer said it will hold fewer internal meetings involving travel and continue using video conference technology.

LEISURE & HOSPITALITY

Online betting group 888 in talks to buy William Hill’s European assets

Online gambling company 888 Holdings has confirmed it is in talks with Caesars Entertainment to acquire William Hill’s European operations after outbidding Apollo Global Management with an estimated bid of more than £2bn.

MANUFACTURING

Make UK: New tax “ill-timed and illogical”

Stephen Phipson, the boss of manufacturing trade group Make UK, said the new social care tax's introduction was “ill-timed as well as illogical.” He said that “firms need capital to reset”, and told the BBC: “After witnessing large scale redundancies at the height of the pandemic and the plug being pulled on the furlough scheme, government should be putting in place measures to protect jobs and incentivise recruitment.”

TransDigm pulls out of bid for Meggitt as it paves way for US rival

US aircraft parts maker TransDigm has withdrawn its bid for UK aerospace and defence group Meggitt, paving the way for US rival Parker Hannifin to seal its agreed £6.3bn takeover of the group.

MEDIA & ENTERTAINMENT

Deutsche Telekom deepens bet on US market with SoftBank deal

Deutsche Telekom has sold its Dutch unit T-Mobile Netherlands to Apax and Warburg Pincus for €5.1bn. Meanwhile, Softbank Group said on Tuesday it had agreed a share swap deal with Deutsche Telekom that will see the Japanese group unload a large portion of fixed price options it holds in T-Mobile US in exchange for Deutsche Telekom shares.

UK watchdog warns Sony music deal could hurt artists

The Competition and Markets Authority has raised concerns over Sony’s $430m acquisition of AWAL, the independent record label, warning it could lead to “worse terms for artists and less innovation in the music sector”.

REAL ESTATE

Mortgage price war helps lift average UK house price

New figures from Halifax indicate that a combination of ultra-low interest rates, pent-up demand and a rebounding jobs market saw the price of a typical home rise 0.7% month-on-month in August to £262,954. It means the average price of a UK home is 7.1% higher now than the £245,602 recorded in August 2020. Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Property prices are rising due to lack of stock, while cheap borrowing rates give borrowers confidence to go after the property of their dreams in the race for space.”

RETAIL

DS Smith set to deliver record profits

DS Smith chief executive Miles Roberts has indicated that the company expects to power on to record profits this year, due to the huge growth in online shopping and home deliveries. He said that strong customer relationships with the likes of the Amazon delivery company and with the chocolate producer Cadbury for its display boxes, were “resulting in excellent volume growth”. He said that DS Smith has been able to pass on rising production costs through higher prices which means that trading remains in line with its expectations. City analysts forecast that the company’s pre-tax profits in the year to next April would put on more than a fifth or nearly £100m on top of the £437m it made in the prior Covid-hit year.

ECONOMY

New tax is a drag on jobs and growth

Suren Thiru, head of economics at the British Chambers of Commerce, said the new 1.25% national insurance contribution introduced by Boris Johnson would be a “drag anchor on jobs growth at an absolutely crucial time”. “Firms have been hammered by 18 months of Covid-related restrictions and have built up huge debt burdens,” he said. “This rise will impact the wider economic recovery by landing significant costs on firms when they are already facing a raft of new cost pressures and dampen the entrepreneurial spirit needed to drive the recovery. Elsewhere, Lord Bilimoria, President of the Confederation of British Industry (CBI), said that although there is “genuine consensus” that social care reforms and greater investment are long overdue, businesses “are already set to be hit by a substantial rise in corporation tax in 2023.” He went on to say that the dividend tax would dampen investment which “plays a critical role in supporting businesses and enabling growth across the whole economy”.

Inflation could force rates rise next year

Michael Saunders, an external member of the Bank of England’s monetary policy committee, said yesterday that if the economy continues to recover and inflation shows signs of being more persistent then interest rates may need to rise in the next year or so. Saunders reiterated his view that continuing with the planned £895bn bond-buying programme under QE risked increasing medium-term inflation expectations.

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