Published: 05 August 2021
By Suzanne Evans, Director, Political Insight
Prime Minister Boris Johnson and Chancellor Rishi Sunak have vowed to overhaul rules governing Britain's asset management industry to make it easier for to firms to invest in the UK. Yahoo Finance UK reports the pair have written to senior investment industry professionals, calling on them to plough more cash into British businesses and assets to create an "investment Big Bang" to help drive the country's recovery. The UK has one of the biggest asset management industries in the world – with over £8.5tn managed here – but UK investors are underrepresented in the public and private markets domestically. Overseas investors own around 55% of the UK stock market, with a similar proportion of non-listed assets. Johnson and Sunak said this was partly to do with rules governing allocations of fund and retail money, rules they were looking to reform where possible. "We need an Investment Big Bang to unlock the hundreds of billions of pounds sitting in UK institutional investors and use it to drive the UK’s recovery," they wrote, echoing language used in the 1980s in the City of London, when a wave of deregulation led to the creation of the modern financial services industry.
The ’traffic light’ travel system has changed again. Austria, Germany, Slovenia, Slovakia, Latvia, Romania and Norway move from amber to green. India, Bahrain, Qatar and the UAE have gone from red to amber. France goes from amber-plus to amber and Georgia, Mexico, La Reunion and Mayotte have been put onto the red list. The changes come into force at 4am on 8th August. They mean fully-vaccinated passengers returning to England, Scotland and Northern Ireland from France will no longer need to quarantine. However, the Department for Transport has now said that "arrivals from Spain and all its islands are advised to use a PCR test as their pre-departure test wherever possible" instead of the cheaper lateral flow tests.
In a series of tweets, Conservative MP Huw Merriman, chairman of the Commons Transport Select Committee, has criticised expensive PCR tests for travel as an "unnecessary rip-off" and a "barrier to affordable travel". In the three-week period from 1st July, he said passengers paid a total of £35million for PCR tests which the Government justifies on the grounds they can be genome sequenced for variants. However, Test and Trace NHS data showed only 5% of positive results were actually sequenced. Merriman repeated his call for the much cheaper lateral flow tests to be used instead, with positive tests then redone and submitted for sequencing.
Pret, McColls and Welcome Break are among almost 200 firms "named and shamed" by the government for not paying workers the minimum wage, Sky News says. In total, 191 companies investigated between 2011 and 2018 failed to pay £2.1m to more than 34,000 workers. The businesses were made to pay back the money as well as being fined £3.2m. Pret, McColls and Welcome Break said the underpayments were historic errors and staff had been swiftly reimbursed. Other organisations named by the government included Sheffield United and four other football clubs, as well as the Body Shop chain, Worcestershire Cricket Club and Enterprise Rent A Car.
Retail giant John Lewis was also named over an underpayment reported four years ago.
The Financial Conduct Authority (FCA) is calling for tighter regulation of the fast-growing buy-now-pay-later industry, which allows consumers to make purchases they then pay for in instalments over time. The main players are Klarna, ClearPay, LayBuy and Afterpay, and the UK market is worth £2.7bn, having quadrupled in size in 2020. Younger consumers in particular have turned to this seemingly more affordable alternative to higher interest credit cards, according to FT Partners. Citizen’s Advice says an estimated 14 million people used the service in the UK last year, but that 39% did so without realising and 42% didn’t fully understand what they were signing up for. Risks include fees and interest on late payments: 41% of users are said to have struggled with payments over the last 12 months. Yahoo Finance says Labour’s Stella Creasy MP has said buy-now-pay-later is a “financial scandal waiting to happen” and she has compared the new industry to payday loans.
Sky News has learnt that Away Resorts is buying rival Aria Resorts, which operates 14 sites across the UK, in a £600m deal. Aria operates popular resorts such as Retallack Resort & Spa in Cornwall and The Bay Colwell on The Isle of Wight.
Nigel Wilson, chief executive of Legal & General has suggested employers in London’s financial district may be struggling more than those in other cities to persuade office workers to return to their desks. He said there were “a lot fewer people working in the City” compared with urban centres across the UK, Europe and the US, adding that it may take years for the historic streets to return to pre-pandemic levels of bustle. “Some 525,000 people work in the City,” he said in an interview, adding that nevertheless “When I’m looking out of my office window, the streets look fairly empty”. However, he did concede that the apparent emptiness of London’s streets could also be due to the summer holidays.
Doorstep lender Provident Financial said yesterday that its proposed scheme to compensate customers for mis-sold loans has been approved by the High Court. Provident had set aside £50m to partially compensate borrowers who had taken out high-interest loans that they could not afford with its Consumer Credit Division (CDD) between April 2007 and December 2020. The company had warned that if the scheme was not approved, the CCD would become insolvent, and claimants would be left with no compensation at all. Chief executive officer Malcolm Le May said approval of the scheme was a "positive outcome" for customers with valid claims, "as it provides access to a redress payment which would not have been possible had the scheme not been approved". "The Court sanction enables us to move forward with the scheme and we expect that creditors will receive redress payments in the second half of 2022," he added.
Video-sharing platform TikTok is trialling a new vanishing clips feature similar to functions on Snapchat, Facebook and Instagram. TikTok Stories will allow users to see content posted by accounts they follow for 24 hours before they are deleted, the BBC reports. WhatsApp meanwhile is today rolling out a feature for users to post photos or videos that vanish after they are viewed once. The feature is only available on the latest version of WhatsApp and is enabled by tapping an icon in the text bar before sending the message. Users are being warned to "only send photos or videos with view once media enabled to trusted individuals," as it is still possible to take a screenshot or screen recording of the media before it disappears. Earlier this week social media platform Twitter shut down its Fleets disappearing stories feature.
Billionaire retail mogul Mike Ashley is reportedly preparing to step back from running Sports Direct and appoint his future son-in-law Michael Murray to the role. Murray has only worked in the business for five years. Ashley founded Sports Direct in 1982 from a market stall in Maidenhead and grew the business into a sporting goods giant. He floated the company on the London Stock Exchange for £2bn in 2007 but has retained a controlling shareholding and has been CEO since 2016 when he took charge after a scandal around working conditions led MPs to condemn conditions at the company's Shirebrook warehouse as "Victorian" and forced the company to admit to paying some staff below minimum wage.
London-listed online consumer brands firm THG said yesterday it has agreed to buy online beauty retailer Cult Beauty for £275m in cash. The business is being bought from private shareholders including majority investor Mark Quinn-Newall and co-chief executive Alexia Inge. Cult Beauty is the authorised online retailer of around 300 prestige third-party brands across skincare, haircare and cosmetics.
British chocolatier Hotel Chocolat is creating 140 manufacturing jobs to support a major expansion of its production facility in Huntingdon. The firm plans to more than quadruple the size of the Cambridgeshire site by 2026 to meet soaring demand.
Gritter manufacturer Econ is to develop a new £7m engineering facility near Thirsk. The family-owned business, which makes more than 85 percent of the UK’s winter road maintenance vehicles, has purchased a 24-acre site at Sowerby, 11-miles from its Ripon headquarters. The site is being developed by Yorkshire-based Triton Construction and when handed to Econ in Spring 2022, is expected to create up to 50 jobs.
Boeing's second attempt at an un-crewed test flight of its new Starliner capsule to the International Space Station has been scrubbed due to an "unexpected valve" problem. The resupply mission was intended to demonstrate that the spacecraft works, but instead the delay will pile the pressure on the embattled company following the failure of its previous launch attempt and the successes of rival SpaceX, according to Sky News. Starliner's first orbital test in 2019 ended with the capsule failing to rendezvous with the ISS due to a software problem, although it successfully landed back on Earth two days later.
Rolls Royce is to sell Spanish jet engine maker ITP Aero to US private equity outfit Bain Capital and Spanish aerospace company Sener for €1.6bn.
Leading investment firm Vanguard says it will pay any of its 16,500 US workers $1,000 if they get the covid vaccine. To qualify for the payout staff must prove they have been jabbed by October. They will still qualify if they were inoculated before the company made its offer. Unlike Microsoft and Google however, Vanguard says they will not make getting the jab mandatory. Blackrock, another large US asset manager, has forbidden unvaccinated employees from entering its US offices since July.
The Australian Competition and Consumer Commission (ACCC) has filed a court case against Mercedes-Benz alleging the company downplayed the risks involved with the use of Takata airbags in its vehicles. The defective airbags, which in rare instances lead to a rupture in inflator and send potentially deadly metal fragments flying, have resulted in the world's largest automotive recall impacting 100 million vehicles. However, the ACCC says staff at Mercedes’ call centres told customers it was "okay" to use vehicles that were more than six years old and that the recall was precautionary as there have been no major incidents. In fact, Reuters reports there had been one death and a serious injury in Australia. By downplaying the risks, the watchdog said consumers were exposed to potentially serious injury or death.
After a disappointing US stock market debut last Friday, when shares dived to end the day at $36, investors in retail trading platform Robinhood yesterday saw their shares surge as much as 82%, up to $85, with trading paused several times due to wild price swings. At times, Robinhood was worth more than famous blue chip companies such as Kraft Heinz and Ford. Speculation is now rife that the firm could be seeing the same frenzied trading that surrounded the video game retailer Gamestop. The commission-free trading platform is popular with young amateur investors – it has doubled its account numbers to 31m since January - but bigger investors have shunned it as being too risky.
The price of bitcoin continued to slide yesterday following a Bloomberg interview with the new US Securities and Exchange Commission chair Gary Gensler, who said consumer protection in crypto was one of his key priorities. In a speech delivered later, he went further and called for additional powers to regulate the sector. "We need additional congressional authorities to prevent transactions, products and platforms from falling between regulatory cracks," he said "We also need more resources to protect investors in this growing and volatile sector.”
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