Published: 24 March 2021
By Suzanne Evans, Director, Political Insight
UK inflation dropped unexpected in February, according to official Office for National Statistics data, as retailers slashed clothing and footwear prices to try and shift excess stock. Annual consumer price inflation was 0.4% in February, falling from 0.7% in January. Economists had forecast a rise to 0.8%.
GBP hit a six-week low against the dollar yesterday, slipping into its weakest week since the start of February off the back of upbeat economic sentiment in the US and vaccine supply fears in the UK. By mid-morning the pound had slipped 0.7% by mid-morning, to trade at £1.38 against the dollar. It was also 0.3% lower against the euro, to trade at £1.16. While economic sentiment was springy in the US, due to President Joe Biden's $3tn (£2tn) stimulus package and vaccine rollout, the pound was weighed down by concerns about a shortage in vaccine supplies on home turf.
The government released more than 30 tax updates and consultations yesterday afternoon. Among them were a move to cut inheritance tax red tape for more than 200,000 estates every year, dramatically reducing the amount of paperwork for 90% of non-taxpaying estates, who will no longer have to complete inheritance tax forms when probate or confirmation is required from 1 January 2022. Also announced was an intention to legislate to tighten tax rules for second property owners, to ensure they only register for business rates if their properties are genuine holiday lets. A senior analyst at AJ Bell called the announcement “the dampest of squibs,” saying the government has missed an opportunity to tackle some obvious flaws in the tax system.
There was an almost 50% year-on-year increase in UK residential property transactions in February: there were 147,050 sales, 48.5% higher year-on-year and 23% higher month-on-month. Sales volumes have now exceeded 100,000 for five consecutive months on a seasonally adjusted basis, for the first time since the summer of 2017.
Abu Dhabi will reportedly invest billions of pounds in British health, tech, green energy and infrastructure as part of a post-Brexit deal. Mubadala, one of the UAE's most active funds, will pay £800m into life sciences over five years, the Financial Times reported. It is thought investments in the other three sectors will be at a similar scale. UK investment minister Lord Gerry Grimstone said he was "expecting equal or better opportunities to be found in those sectors".
AstraZeneca says it will reissue the key data of its American clinical trial "within 48 hours" after the Data and Safety Monitoring Board - a leading US agency on infectious diseases - claimed the company may have given "incomplete" picture of the efficacy of the shot. The board expressed the concerns to the National Institute for Allergy and Infectious Diseases, which in turn released a statement saying this “may have provided an incomplete view of the efficacy data.”
A cocktail of antibodies developed by Roche and US firm Regeneron Pharmaceuticals to treat Covid-19 has been shown to cut hospitalisation or death by 70%, the Swiss drugmaker says. Roche said the treatment met all key secondary endpoints in its phase III trial, which consisted of 4,567 high-risk non-hospitalised volunteers. Symptom duration was also reduced, from 14 days to 10. The companies’ say they can produce more than 2m doses annually.
British Airways’ owner IAG has mortgaged ‘a small number’ of its take-off and landing slots at Heathrow and Gatwick airports to raise £1.3bn by enabling it to renew its corporate overdraft for up to five years. Yahoo Finance UK says it is the first time the FTSE 100 group that also owns Aer Lingus and Spain’s Iberia has offered slots as security to lenders. IAG owns well over half of Heathrow’s slots and almost one in four of Gatwick’s slots. The company said it continues to have "strong" liquidity, with an estimated total of €10.3bn as of the end of March. Mortgaging airport slots to raise capital has been popular in the US for some time, but less common in the UK.
In a further blow to the already beleaguered airline industry, the Treasury has announced the launch of a consultation on passengers taking long-haul journeys from the UK having to pay higher taxes as a way to support the UK’s commitment to net-zero emissions by 2050. The Treasury did however rule out a frequent flier levy.
Travel firm Tui is set to shut 48 more High Street shops in the UK, affecting 273 jobs. The UK's largest tour operator said it would offer to redeploy employees at risk of redundancy to other stores or to work from home. The move follows the closure of 166 Tui shops announced in July 2020 which affected up to 900 jobs. Both decisions were made after the pandemic sped up a shift to people making online holiday bookings. Tui will have 314 High Street retail stores remaining following the closures.
The sale of Rolls Royce’s Bergen marine engine business to Russia's TMH Group has been blocked by Norway on national security grounds. The firm says it is now working with the Norwegian government to "find another option."
Consumer reviews website Trustpilot said yesterday that its London Stock Exchange Initial Public Offering will come in at 265p-per-share, valuing the company at £1.1bn.
Hartford Financial Services Group has rejected a $23bn takeover approach from US non-life insurer Chubb, it confirmed yesterday.
Environmental infrastructure investor Jlen announced the acquisition of a 100% equity stake in Rainworth Energy for £5.8m yesterday. Rainworth holds the rights and operational assets to the Rainworth anaerobic digestion electrical plant in Nottinghamshire, close to Jlen's existing Biogas Meden plant.
Sky News has learnt that Kingswood Acquisition Corp, which listed in New York late last year, has signed a letter of intent to acquire Lombard, one of the UK's biggest wealth management groups. While a deal is not yet certain, the talks pave the way for one of the first takeovers of a British-based financial services business by a New York-listed Special Purpose Acquisition Company (SPAC). Lombard, which has been owned by Blackstone since 2014, had more than €47bn in assets under administration last June. Analysts believe a deal could value Lombard at around €700m (£605m).
FTSE 100 mining company Glencore is to appoint Gary Nagle as chief executive on July 1. He will succeed Ivan Glasenberg, who is set to retire on June 30.
Royal Dutch Shell and Hyundai have teamed up to “facilitate the delivery of zero-emissions mobility solutions for a carbon-neutral future,” entering a five-year global business cooperation agreement, Yahoo Finance UK reports. Both companies will develop and deploy zero-emission battery electric and hydrogen mobility solutions, mostly for customers in Asia, and discuss cooperation schemes for energy supply businesses, including electric vehicle and FCEV charging services.
The world’s largest coal mining firm is to "aggressively" pursue solar energy and continue to close smaller mines, reports Sky News. Coal India Limited plans to invest in a 3,000-megawatt solar energy project in a joint venture with state-run NLC India. The company also wants to compete in India’s solar auctions and win projects by offering the lowest prices for clean power. It marks a major shift for the firm, which produces most of India’s coal.
Cineworld, the world’s second-largest cinema operator, will reopen its screens in the US next month to coincide with the new film releases Godzilla vs Kong and Mortal Kombat, striking an exclusivity agreement with Warner Bros to do so. Having been shut for the past six months, some of Cineworld’s 536 Regal theatres in the US would open on Good Friday (2 April) and the remainder on 16 April.
Swedish truckmaker Volvo Group is warning that a global shortage of semiconductors will hit production this year and dent earnings. The firm will implement stop days across its global truck manufacturing options for between two and four weeks in total, based on current estimates.
China's biggest carmaker, Geely, is launching a premium electric car brand it hopes will take on Tesla. The Chinese company, which owns Volvo and Lotus, announced its Zeekr brand yesterday. Geely said it expected to begin deliveries in the third quarter of 2021.
The price of bitcoin spiked up again yesterday after Elon Musk said on Twitter the cryptocurrency could now be used to buy Tesla electric vehicles, and be “retained as Bitcoin, not converted to fiat currency." Bitcoin was up 3% against the dollar to $55,444.21 shortly after the tweet.
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