Chancellor Rishi Sunak has outlined plans for the reform of UK financial services regulation

By Suzanne Evans, Director, Political Insight

Chancellor Rishi Sunak has outlined plans for the reform of UK financial services regulation after Britain’s exit from the European Union. The “once-in-a-generation" reforms set out the government’s vision for “an agile and dynamic approach to regulation that supports the growth of the UK economy” and forms part of a wider agenda to review the laws which currently govern the country. The plans require the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) to consider both the implications for growth and international competitiveness of their regulations, as well as their existing objectives of maintaining market integrity, consumer protection and a sound financial system, the Treasury said. The Treasury is also set to gain new powers which will allow it to force the FCA and the PRA to scrutinise their rules if the government believes the current regime is not “in the public interest”. “Earlier in the year, I set out my vision for an open, green, and technologically advanced financial services sector that is globally competitive and acts in the interests of communities and citizens across the UK, creating jobs, supporting businesses and powering growth across the UK,” Sunak said yesterday. “One important part of that vision is ensuring, as an independent nation, that we have a coherent, agile and internationally-respected approach to financial services regulation that is right for the UK. “Today’s proposals will support the future strength of the UK as a global financial centre, ensuring an agile and dynamic approach to regulation that supports the growth of the UK economy, without diverging from our continued commitment to high international standards.” The consultation will close on 9 February next year, after which the government will consider responses.
 
The Bank of England (BoE) and the Treasury have laid out the next stages of their plans to investigate a potential UK Central Bank Digital Currency(CBDC), opening the way to what they call the "development" phase of planning. If the results of this "development" phase concludes that the case for CBDC is made, and that it is operationally and technologically robust, then the earliest date for launch of a UK CBDC would be in the second half of the decade, the Bank said. A potential digital pound, dubbed 'Britcoin' by the press, has been in the offing since April this year. In September, the bank brought in representatives from ASOS, Spotify and PayPal, among others, to consult on its CBDC Engagement and Technology forums.
 
By UK region, London saw the largest estimated regional decrease in the number employees between September 2019 – September 2020 according to the Office for National Statistics’ (ONS) Business Register and Employment Survey (BRES) released yesterday. The capital lost 130,600 employees, down 2.5% from 2019. Within London, Westminster was the region that saw the biggest decrease in employees during the period, with an estimated fall of 32,500 jobs. Tower Hamlets was the second biggest loser, losing 15,300 employees, followed by Camden, which was down 14,000 workers year-on-year. The North East saw the largest percentage decrease in employees by region (down 30,300, or 2.8%), followed by the North West(down 91,500, or 2.7%). Of all the 12 regions in the UK, the ONS survey found 11 saw a decrease in employees; only the East of England saw an increase (up 5,000, or 0.2%) with health sector employees increasing by 20,700 (6.2%), transport and storage by 18,100 (13.2%) and retail by 16,100 (6.3%).
 
According to a new survey by Kantar, like-for-like grocery inflation hit 2.1% in October, the highest and fastest-rising level since August 2020. Crisps, canned drinks, and savoury snacks were among the products whose prices rose fastest because of supply chain disruption and the HGV driver shortage. However, prices fell for products such as fresh bacon, vegetables and cat and dog treats.
 
The Ministry of Defence has awarded a £100m contract to a consortium of firms led by Babcock to "deliver cutting-edge electronic warfare systems to the Royal Navy". Elbit Systems UK and Qinetiq are the other two companies participating in the partnership. The chief of aim of the new technology was to allow for the simultaneous detection and identification of radio signals over a greater frequency range than currently possible. "In a world of rapidly evolving threats, these enhancements will upgrade the Royal Navy with pioneering radar detection capabilities maintaining the UK's operational advantage at sea," said Defence Secretary of State Ben Wallace. Approximately 170 jobs will be created and sustained in the UK over the contract's 13-year life, predominantly in the South West of England, with roles ranging from manufacturing to software development.
 
A consortium led by Rolls-Royce secured some £450 million in funding to develop small modular reactors yesterday. The programme is expected to create 40,000 British jobs by 2050 and generate £52bn of economic benefit. 80% of the components will be made in the UK. The reactors are part of the drive to generate clean energy. A £210m grant from the government is part of the government’s green 10-point plan to kickstart the green economy over the next decade, and private companies are investing a further £195 million. The project is also set to receive a second phase top-up of £50m from Rolls-Royce.
 
Shepherd Neame reported a full-year loss yesterday, due to Covid restrictions. In the year to 26 June, the company swung to an operating pre-tax loss of £4.2m from a profit of £1.5m the year before, with revenues down to £86.9m from £118.2m. Shepherd Neame pointed out that its pubs had been closed for 296 of the previous 421 days when they were allowed to reopen indoors on 17 May 2021. "It would be hard to imagine worse circumstances. Indeed, it has been pointed out that since brewing began on the Faversham site around 1573, there had never been a prolonged cessation of any part of our business until March 2020," the group said.
 
British Airways is set to add around 4,000 staff to its workforce by next summer, reversing an earlier decision to cut employee numbers in response to covid-related travel restrictions. Pilots, cabin crew, ground staff and back-office roles will all be sought as part of the recruitment drive. The company currently employs 30,000 people. Chief executive Sean Doyle told Bloomberg: “We’re actively recruiting. It’s exciting to be rebuilding the airline and to be creating opportunities again after two years where we haven’t been able to fly much.”
 
Anglo-Swedish pharma AstraZeneca (AZ) is to create a new vaccines unit dedicated to the Covid-19 vaccine and tweaked versions to deal with new variants of Sars-CoV-2, bringing together people previously been based in different parts of the business. The move will not involve any extra investment in vaccines but will make it easier for the company to continue making the Covid-19 shot over the long term, the Guardian says. AZ was chosen to develop the Covid-19 vaccine in conjunction with the University of Oxford, despite limited experience. Unlike rivals, AZ also committed to supply its coronavirus vaccine at cost during the pandemic period. About 1.8bn doses of the AZ vaccine have been delivered across 170 countries, and AZ has also supplied 38% of the vaccines for Covax, a United Nations scheme for low and middle-income countries.

Nanopore-based technology firm Oxford Nanopore Technologies updated its full-year revenue guidance yesterday following a "significant expansion" of its activities in a large customer project in the United Arab Emirates. The company said yesterday that it had been awarded a new 36-month contract with G42 Laboratory, under which it will provide devices, consumables and other support services worth approximately $68 million. The London-listed group stated the project was expected to generate revenues primarily after the year-end.
 
Primark owner Associated British Foods (ABF) plans to open more than 100 new shops over the next five years, primarily in the US, France, Italy and Spain, to take the number of stores worldwide to 530 from 398 at present. In the US, where Primark opened its first store in Boston six years ago, it plans to go from 13 to 60 outlets over the period. The retailer has also pledged not to raise prices in the UK. George Weston, chief executive of ABF, told the PA news agency that the retailer has seen rising energy and distribution costs but will not pass this on to customers. “We haven’t increased prices at Primark over the past 10 years and we won’t do so this year,” he said. “We have currency difference in our favour and there are other areas we have recognised to find cost savings so won’t pass that on.”
 
British manufacturer Tiger Trailers is ramping up production and creating 50 new jobs at its £22 million factory in Winsford, Cheshire. The 168,000 sq ft trailer production facility, which opened in 2019, already employs more than 200 people.

Energy storage and clean fuel technology company ITM Power has agreed heads of terms to acquire a site for its second UK factory in Tinsley, Sheffield, from the University of Sheffield. The AIM-traded firm said the site was part of the university's 'Innovation District', close to the M1 motorway and public transport links. ITM said the land had outline planning consent and that the overall cost of the new Sheffield factory is expected to be in the region of £50m to £55m.
 
Virgin Galactic says it is seeing significantly increased interest in space travel. In the space tourism company’s Q3 2021 Earnings Call, CEO Michael Colglazier said “we've been selling seats ahead of the pace we had planned" despite the increase in ticket prices from $250,000 to $450,000. 700 reservations are now filled for future space flights, up from 600 previously, which implies the company has managed to sell 100 seats at the higher price.
 
US share-trading app Robinhood has been hit by a ransomware security breach that has exposed the names or email addresses of more than seven million people. The company says the breach affected "a limited amount of personal information for a portion of our customers,” and insisted the most sensitive information the platform gathers - US social security numbers and financial information - was not revealed. Robinhood said it had rejected a demand for payment, reported the attack, and hired an external cyber-security firm to help deal with the incident.
 
Facebook's parent company will no longer allow advertisers to target people based on sensitive topics, including politics, race and sexual orientation, Sky News reports. The tech giant - which recently changed its name to Meta - said it made the "difficult decision" to prevent advertisers from "abusing the targeting options we make available". Meta VP Graham Mudd said in a blogpost the platform will remove the "detailed targeting options that relate to topics people may perceive as sensitive" from 19 January 2022. These include health causes, sexual orientation, religious practises and groups, and political beliefs, social issues, causes, organisations, and figures. Advertisers will still be able to target adverts based on topics, such as age, gender and location. Mudd acknowledged the change would cause difficulties for some advertisers, such as small businesses or advocacy groups as they will no longer be able to target advertising for causes such as same-sex marriage, World Diabetes Day, or Jewish holidays.
 
Wall Street closed lower yesterday, ending a multi-day rally of consecutive record closing highs as profit-taking and worries over ongoing inflation fuelled a broad sell-off. All three major US stock indexes lost ground, marking the conclusion of an eight-session streak of all-time closing highs set by the S&P 500 and the Nasdaq. "We've had an incredible run, so letting some air out of the balloon is perfectly normal," Ryan Detrick, chief market strategist at LPL Financial in Charlotte, North Carolina, told Reuters.
 
Bitcoin hit new records of $68,000 (£50,000) per coin for the first time ever yesterday. Ethereum also pushed to all-time highs of $4,840. According to CoinGecko, the total value of digital tokens has now reached $3.1tn.

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