BANKING
Consumer campaigner concerned over fraud refund rate
Analysis shows that more than £207m was lost to push payment fraud in the first six months of the year. A report on the banking industry's voluntary refund code by Which? says the likelihood of a saver targeted by fraudsters getting their money back depends on who they bank with, with it found that one bank reimbursed just 1% of victims some of their money, while at rival lender the figure was 93%. Commenting on the findings, consumer finance campaigner Mark Taber criticised banks that use "generic scam small print as a reason to reject refund claims from victims". He warned that some lenders are failing to carry out proper anti-money laundering checks or check payee ID, adding that some are not delivering adequate suspicious transaction screening or vulnerable customer protection.
Curve and Plaid unite to deliver open banking
Smart banking platform Curve has joined forces with Plaid to help people manage their money. The Curve app, which allows consumers to spend from multiple bank accounts using a single debit card, will use Plaid’s Open Banking platform and database to connect accounts from banks including Monzo, Starling, Barclays and HSBC.
INTERNATIONAL
UBS to sell Austrian wealth business
UBS is selling its domestic Austrian wealth management business to Liechtenstein-based private bank LGT. LGT said the acquisition would help bring its managed assets to €12bn in Austria and make it the leading private bank for high net worth clients in the market.
German court rules on Postbank takeover by Deutsche Bank
The Cologne Higher Regional Court in Germany has ruled that Deutsche Bank does not have to pay former investors in retail subsidiary Postbank a higher compensation than they were offered in 2010. Claimants had argued that Deutsche Bank had effectively taken control of the smaller lender when it acquired a stake of just under 30% in 2008, which the court rejected.
Sabadell CEO replacement named
Cesar Gonzalez-Bueno is to replace Jaime Guardiola as chief executive of Spanish bank Sabadell, with the appointment coming following the collapses of merger talks with rival BBVA.
AUTOMOTIVE
BMW warns no-deal Brexit will cost carmaker ‘hundreds of millions’ of euros
BMW chief financial officer Nicolas Peter has cautioned that a no-deal Brexit could see the firm lose “hundreds of millions” of euros, with increased tariffs passed on to UK consumers.
AVIATION
CMA investigates airlines over refunds
Airlines are being investigated by the Competition and Markets Authority (CMA) over concerns they failed to offer refunds to passengers when they could not travel. The CMA will look at cases during England's second lockdown when people were unable lawfully to travel for non-essential purposes and consider whether refusing cash refunds breached consumer rights. It said that in some cases where flights were not cancelled, customers were told to rebook or offered a voucher rather than a refund.
Heathrow third runway approved by Supreme Court
Heathrow airport’s third runway expansion plans can go ahead after the UK Supreme Court overturned a decision by the Court of Appeal to block the project.
CONSTRUCTION
Travis Perkins to return £50m of UK government help
Government aid worth £50m is to be returned by builders’ merchant Travis Perkins after sales at the firm remained robust throughout the coronavirus crisis.
FINANCIAL SERVICES
Pimfa: FCA fines could offset FSCS levy
The Personal Investment Management & Financial Advice association (Pimfa) has called for regulatory fines imposed by the Financial Conduct Authority (FCA) to partially offset the levy raised by the Financial Services Compensation Scheme (FSCS). Pimfa, which has been calling for reform the lifeboat compensation scheme, has suggested that using fines imposed on regulated firms could limit FSCS levy increases to a "more manageable level" – or prevent the charge climbing at all. Tim Fassam, director of government relations and policy at Pimfa, said the FSCS has seen well-run firms “picking up the bill” when the market goes wrong, adding: “Having the polluter pay via FCA fines ensures a quick reduction that ensures industry support for the much-needed longer-term reform."
LEISURE AND HOSPITALITY
Hospitality fears predate new tiers
Office for National Statistics survey data shows that over 25% of UK pub and bar operators feared their business would fail even before the latest coronavirus lockdown restrictions were announced. Lobby group UK Hospitality’s chief executive Kate Nicholls commented: “So many pubs, restaurants, bars, cafes and hotels, having invested so much to make their venues safe, are only just clinging on by the skin of their teeth,” noting that “the burden of a region being moved into Tier 3 falls almost exclusively on hospitality businesses.”
MEDIA AND ENTERTAINMENT
Washington Post signs up for new online advertising tool
The Washington Post has signed up to a new identity system developed by US adtech firm The Trade Desk, which allows for targeting online advertisements at readers.
REAL ESTATE
House prices climb 5.4%
Data from the Office for National Statistics shows that property prices rose by 5.4% year-on-year in October, up from a 4.3% increase recorded in September. The increase, which was driven by a surge in buyers looking to complete deals before the stamp duty holiday comes to an end on March 31, pushed prices to a record average of £245,000. Scotland led the way on price rises, with the average climbing 6% to £163,000. Prices in England, Wales and Northern Ireland grew 5.4%, 5.8% and 2.4% respectively.
RETAIL
Dixons Carphone reports major rise in first-half profit
Dixons Carphone has reported a significant rise in first-half profit, with online sales more than offsetting the forced closure of its stores during pandemic-enforced lockdowns. In the six months to October 31, it made an adjusted pre-tax profit of £89m, significantly up on the £2m it recorded in the same period last year. Revenue increased to £4.86bn, from £4.71bn, with online sales soaring 114% to £1.8bn.
ECONOMY
Inflation falls to 0.3% in November
Inflation fell to 0.3% in November from 0.7% in October, Office for National Statistics (ONS) figures show. Discounting by clothing retailers helped pushed the consumer prices index down, with bigger discounts than usual offered on Black Friday. ONS deputy national statistician for economic statistics Jonathan Athow noted the impact of the “significant restrictions” in place across the UK. Laith Khalaf, financial analyst of investment platform AJ Bell, said that as England’s national lockdown meant statisticians were unable to collect all of the usual data, November’s reading may not offer adequate insight into the climate, saying “the broader picture remains one of low inflation and that spells low interest rates for the foreseeable future.” Samuel Tombs, the chief UK economist at Pantheon Macroeconomics, commented: “We think the headline rate will average at only 1.5% in the final three quarters of 2021, provided that a no-deal Brexit is averted”.
Businesses return to growth
UK businesses have returned to growth this month following a downturn driven by the England-wide lockdown in November, with the IHS Markit purchasing managers’ index (PMI) climbing to 50.7 in December from 49 in November on an index where a figure above 50 indicates expansion. Manufacturing led the way, with the sector’s PMI reading hitting a three-year high of 57.3, while the services sector, which makes up about 80% of the economy, saw a reading of 49.9. Chris Williamson, chief business economist at IHS Markit, said the PMI data suggests the blow dealt to the economy by the second wave of coronavirus infections “has so far been far less harsh than the first wave.” However, he added that the recovery “lacked vigour”.
Chancellor: Borrowing not sustainable
With Government borrowing hitting more than £22bn in October, Chancellor Rishi Sunak says current levels are unsustainable. Office for National Statistics data shows that between the start of the financial year in April and October, the state borrowed £215bn, with this driven by the coronavirus crisis and the cost of the Government’s response. Mr Sunak has told the Spectator: “It is clearly not sustainable to borrow at these levels. I don’t think morally, economically or politically it would be right.”
Times panel says rates should stay unchanged
The Times’ panel of economists believes the Bank of England should keep policy unchanged when it publishes its latest monetary policy decision today. The majority of the paper’s shadow monetary policy committee – which consists of nine former rate-setters and economists - said the Bank should leave rates and quantitative easing (QE) unchanged. Sir John Gieve said: "If there were signs of the Government running into market reluctance to lend, there would be a case for the Bank intervening to give it more time. But I don't think there are.” CBI chief economist Rain Newton-Smith said that while the Bank “is right to test the waters on negative interest rates … I wouldn't press the trigger on this now.” Karen Ward, chief market strategist at JPMorgan Asset Management, was the only panellist to support more QE, calling for another £100bn expansion.
OTHER
Loan schemes hold off insolvencies
The Independent’s Ben Chu says that while large numbers of firms have been hit financially by the coronavirus crisis, the number of business insolvencies has fallen this year, with this in large part thanks to state-backed bank loans. Colin Haig of restructuring trade body R3 says the reason the impact of the pandemic “hasn't shown up in the insolvency statistics yet is because of the extensive support the government has provided”. He adds: "Without it, we'd be in a very different situation - and a very grave one at that." Mr Chu highlights that across a number of Government loan schemes, 1.5m firms have tapped £65bn of credit, while Bank of England figures show that net bank lending to SMEs in the year to October was more than 40 times higher than the average of previous years. With the Bank saying further support will be needed, the Treasury is working on a successor to the loan schemes. Mr Chu warns that if officials make the new scheme considerably more rigorous, many firms could find themselves facing insolvency.