Published: 19 August 2021
By Suzanne Evans, Director, Political Insight
The International Monetary Fund (IMF) has said Afghanistan will no longer be able to access the lender's resources following the takeover of the country by the Taliban. An IMF spokesperson said the move was due to "lack of clarity within the international community" over recognising a government there. Over $370m (£268m) from the IMF had been due to arrive in Afghanistan on 23 August as part of a global IMF response to the economic crisis. Meanwhile President Biden’s administration has confirmed that any Afghan central bank assets held by the US will not be made available to the Taliban. Da Afghanistan Bank (DAB) has reserves in cash, gold and other assets of roughly $9bn (£6.5bn), most of which is held in America. DAB's former governor, Ajmal Ahmady, who fled the country over the weekend, warned the Afghan economy could nosedive. On Twitter, he said “The accessible funds to the Taliban are perhaps 0.1-0.2% of Afghanistan's total international reserves. Not much." “Currency will depreciate - Inflation will rise as currency pass through is very high - This will hurt the poor as food prices increase,” he added.
Business Secretary Kwasi Kwarteng has instructed the Competition and Markets Authority to prepare a report on the proposed takeover of Ultra Electronics by the US-owned Cobham Group. While the UK is “open for business,” he said, foreign investment "must not threaten our national security". Kwarteng added he had tabled an Order in Parliament preventing Ultra from "disclosing sensitive information to Cobham" about the goods or services it provides to the government or armed forces. Ultra is a major supplier to the Royal Navy. A £2.57bn deal for London-listed Ultra has already been agreed in principle.
The government has published plans to attract at least £4bn of investment to the hydrogen economy by 2030 so enough hydrogen can be produced to replace fossil fuel gas for heating and cooking in about 3m British households. The Guardian says the strategy document says a UK-wide hydrogen economy could be worth £900m and create more than 9,000 high-quality jobs by the end of the decade, rising to £13bn and 100,000 new jobs by 2050. It lays out proposals to attract investment in 5 gigawatts of hydrogen production by 2030, which would mostly power heavy industry, as well as transport and up to 70,000 homes, and suggests hydrogen could cover 20-35% of the UK’s energy consumption by 2050, providing a clean alternative to oil and gas in energy-intensive industries, power and transport. A series of industry consultations will help establish a subsidy system to support large hydrogen projects to decarbonise areas that cannot run on electricity. It is unclear whether such subsidies will be shouldered through household bills or by the Treasury.
Four projects have been awarded a total of £91.7m in government and industry funding through the Advanced Propulsion Centre's Collaborative Research and Development competition. BMW has been awarded £26.2m to develop an electric car battery at its Oxford plant that can offer a similar driving range to internal combustion engines. Birmingham-based Project CELERITAS will receive £9.7m to create ultra-fast charging batteries for electric and fuel cell hybrid vehicles. The Cummins-led BRUNEL project in Darlington gets £14.6m to develop a novel zero emission, hydrogen-fuelled engine to help decarbonise heavy goods vehicles. REEcorner in Nuneaton has been awarded £41.2m to radically redesign light and medium-sized commercial electric vehicles by moving the steering, breaking, suspension and powertrain into the wheel arch enabling increased autonomous capability, storage space and design flexibility. Combined, the projects are expected to save 32m tonnes of carbon emissions and secure more than 2,700 jobs across the country.
UK house prices increased by 13.2% in the year to June 2021, up from 9.8% in May 2021, the government said yesterday. This means the average property in the UK is now valued at £265,668, according to new Department of Housing statistics.
The annual pay of FTSE 100 chief executives fell last year but still equated to 86 times what an average worker paid £31,000 a year would earn in a lifetime, according to a report from The High Pay Centre. The think-tank said bosses were paid £2.69m on average in 2020, a drop of 17% compared with the £3.25m recorded in 2019. Average bonuses also fell to £828,000, down from £1.1m in 2019. Pascal Soriot, the chief executive of AstraZeneca (AZ), was Britain's highest paid FTSE 100 company boss. Despite intense criticism for being absent when crises erupted over supply issues and rare blood clots linked to AZ’s Covid-19 vaccine - spending from Christmas to April in Australia visiting his wife and children - he took home £15.45 million. His pay was well ahead of the next highest paid, Brian Cassin of credit reference agency Experian, who made £10.3m. The GMB trade union joined the High Pay Centre in highlighting the gulf between executive rewards and ordinary wages and raised concerns that some businesses offering bumper pay deals nevertheless relied on taxpayer backing during the pandemic. Nine FTSE 100 companies used the furlough scheme for their employees but have not yet said they will pay it back, despite their bosses earning an average of £2.2m each. These companies include Ladbrokes’ owner Entain, British Airways owner IAG and Rolls-Royce.
John Lewis’ announced this morning that its financial arm is to launch its first investment products to customers in partnership with Nutmeg, a digital wealth manager. Yahoo Finance UK reports. Its offering will include a junior ISA with a yearly tax-free allowance of £9,000, which children can access when they turn 18; a stocks and shares ISA; and a general investment account for those who have used up their £20,000 ISA allowance for the year. John Lewis says all their ISAs will invest in funds with high environmental, social, and governance standards and are aimed at those who would not normally consider investing. John Lewis says it has committed £100m over the next five years to quadruple its financial services business and relaunched its home insurance and retail credit offers earlier this year. This latest move is part of the firm’s new strategy of wanting 40% of profits to come from outside retail by 2030. This also includes building 10,000 rental homes in the next 10 years.
Housebuilder Persimmon has reported a 64% rise in profits for the first half of the year fuelled by Britain’s unlikely property market boom in the Covid-19 pandemic, says The Guardian. The UK’s biggest housebuilder by market value yesterday revealed that pre-tax profit for the first half of 2021 increased to £480m, up from £292m over the same period last year. It said it expected sales to remain above pre-crisis levels.
Spanish-owned Gestamp is creating 130 jobs at its Newton Aycliffe factory after securing new contracts with Nissan, BMW and Jaguar Land Rover. The automotive components manufacturer already employs more than 1,000 people at the County Durham plant.
A group of seven British organisations including battery materials firm Johnson Matthey, start-up Britishvolt and Oxford University said on Thursday they had formed a consortium to develop solid-state batteries for electric vehicles. The consortium will build a facility to develop prototypes and technologies for the mass production of solid-state batteries. It also includes the government-funded Faraday Institution, which aims to help UK businesses develop and manufacture EV batteries.
Family-owned Village Bakery has opened a new multi-million pound factory in Wrexham. The 140,000 sq ft production facility has been hailed 'the most modern bakery in Europe'.
Ballymena-based Wrightbus is to create 300 new jobs and offer permanent contracts to 120 existing agency staff as it ramps up production having won a string of orders from the UK and Ireland. Manufacturing news portal MTD MFG says the firm, which “is leading the world in zero emission passenger transport,” will also convert 120 existing temporary jobs into permanent positions. Wrightbus was bought out of administration by green entrepreneur Jo Bamford in October 2019. It had just 56 members of staff when he took over. Now, having seen considerable growth driven by technological development - including the creation of the world’s first hydrogen double decker bus, and a market-leading electric double decker bus – the firm is on track to have 930 permanent employees once the new positions have been filled.
Nando's says it plans to have all its restaurants open again from Saturday after supply chain disruption forced 45 sites to close.
More than 40 million T-Mobile customers have been hit by a US data breach, the BBC reports. T-Mobile is blaming the breach on a "highly sophisticated cyberattack". It said it is "taking immediate steps to help protect all of the individuals who may be at risk” and says that while criminal hackers stole personal information, no financial details were leaked.
Wall Street watchdog the US Securities and Exchange Commission (SEC) has charged three former Netflix software engineers over an alleged insider trading ring that made $3m (£2.2m). The ex-staff members and two close associates were named in court papers. The SEC said confidential Netflix subscriber growth data was allegedly used to trade the streaming giant's shares ahead of earnings reports.
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