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Interest rates have increased for the third time in four months

   News / 18 Mar 2022

Published: 18 March 2022
Location: London, UK

By Suzanne Evans, Director, Political Insight


Interest rates have increased for the third time in four months. Yesterday the Bank of England (BoE) increased the base rate from 0.5% to 0.75%, citing rising inflation and strong employment as the reasons for the move. Rates are now at their highest level since March 2020, when Covid lockdowns began. Announcing its decision, the Bank warned inflation may reach 8% in the coming months, and get into double-digits later in the year if energy prices push up the energy price cap.
 
Lloyds, Barclays and Santander banks have increased mortgage rates for a third time for customers on variable interest rate or tracker mortgages in line with the BoE rise of 0.25%.  The rise will cost borrowers with £250,000 in outstanding mortgage debt an extra £624 a year, or £52 a month. Yorkshire Building Society also announced its mortgages were going up for the first time since the BoE began hiking interest rates. Most other lenders are expected to follow suit.
 
P&O Ferries yesterday fired 800 crew members – reportedly via Zoom - with immediate effect and halted all sailings for “several days.” The company, owned by the Dubai-based DP World, earlier ordered all vessels to port "in preparation for a company announcement" which was that the business was no longer viable, and that it was looking to use cheap agency staff to operate its ships, and an agency to keep its ferries running, in a bid to shore up its finances. "We have made a £100m loss year-on-year, which has been covered by our parent DP World. This is not sustainable," the company said in a statement. The RMT union and MPs have reported seeing busloads of agency staff waiting at various ports, ready to replace P&O's terminated workforce. RMT general secretary Mick Lynch said he had “instructed” union members to remain onboard and is calling on Transport Secretary Grant Shapps to intervene “to save UK seafarers from the dole queue.” Shapps expressed concern at the shock announcement, saying he is having “urgent discussions” with officials.
 
The planned closure of several Department for Work and Pensions (DWP) offices directly threatens more than 1,100 jobs, The Public and Commercial Services (PCS) union claims, adding that some 2,000 more members of staff are at risk of redundancy when they are transferred to new premises by June 2023 in a move to consolidate sites. DWP minister David Rutley told MPs in parliament yesterday that meetings were being held with affected staff and admitted that the DWP is “looking to close offices in high economic deprivation areas” as this is “counter-intuitive to the so-called levelling-up agenda”.
 
There is “no guarantee” that post-Brexit trade deals will deliver any real economic benefits unless firms are given greater support to take advantage of them, b have warned. PA Media says a cross-party report from the Commons Public Accounts Committee concluded the Government had not provided sufficient clarity about the “trade-offs” involved in the deals signed by the UK since leaving the European Union, particularly the impact on British farmers,while the environmental impact of increasing business with countries further afield than EU neighbours “remains uncertain”. The committee also cast doubt on the Government’s goal of having 80% of the UK’s trade covered by free-trade deals by the end of the year, particularly as progress on an agreement with the United States is “on hold”. The report also criticised a “lack of clarity” from the Department for International Trade about how it will measure whether it is achieving any benefits from its negotiations on free-trade agreements.
 
Thousands of steelworkers were the victims of pension regulation failuresthat left some with losses of up to £489,000, an official report has found, prompting accusations that the UK financial watchdog was “asleep at the wheel”. The Guardian says findings by The National Audit Office (NAO) relate to a 2017 scandal involving members of the British Steel pension scheme, many of whom were persuaded to transfer their retirement savings by advisers who then pocketed huge fees. The NAO says some of these workers “have suffered significant financial losses because they were provided with unsuitable advice … and they have not been compensated fully.” This has prompted Dame Meg Hillier, chair of the public accounts committee, to say the case “was a failure from top to bottom … The Financial Conduct Authority, whose job it is to regulate these firms, was asleep at the wheel”.
 
A special investigation by The Times has found that hundreds of civil servants at the DVLA have done no work on full pay for significant periods of the pandemic, while managers boasted of watching Netflix at the public’s expense. Most of the government agency’s 6,200 staff were sent home during the first lockdown but 3,400 of them were put on paid special leave without having to do any work at all, the newspaper reports. The move led to record backlogs: one million driving licence applications are still outstanding.
 
Ofcom has revoked Russian state-backed news channel RT’s broadcast licence "with immediate effect", media regulator Ofcom has said. "We do not consider RT's licensee, ANO TV Novosti, fit and proper to hold a UK broadcast licence," the media watchdog explained, adding it is still carrying out 29 investigations "into the due impartiality of RT's news and current affairs coverage of Russia's invasion of Ukraine". The channel had already disappeared from all broadcast platforms in the UK earlier this month as a result of a ban imposed by the European Union, as the bloc applied sanctions to satellite companies in Luxembourg and France, which provided the RT feed to Sky, Freesat and Freeview in the UK.
 
All remaining Covid travel measures, including the Passenger Locator Formand tests for unvaccinated arrivals, have now ended in the UK. However, the Department for Transport says it will keep a range of "contingency measures" in reserve so "swift and proportionate action" can be taken tackle new variants. These are believed to include targeted testing from a country where a new variant has been detected. Bloomberg says there are now 18 places you can travel unvaccinated and with no covid testing or quarantine requirements: the UK, Bahrain, Costa Rica, Curaçao, El Salvador, Hungary, Iceland, Ireland, Jordan, Liechtenstein, Switzerland, The Maldives, Mexico, Mongolia, Montenegro, Norway, Romania, Saudi Arabia, and Slovenia.  
 
Vodafone says it is creating 300 new jobs at its centre in Stoke-on-Trent over the next year and transforming the site into a base for training, sales, and a franchise academy. 600 people already work at the firm’s Festival Park offices.
 
Sky News claims US private equity firm Sycamore Partners is working with advisers to examine a potential offer for London-listed fashion chain Ted Baker.Sycamore specialises in investments in the retail sector, having previously owned brands such as the upmarket footwear label Kurt Geiger. Earlier this week, it was linked with a $9bn (£6.85bn) takeover bid for Kohl's, the US department store chain.
 
TM Lewin has gone into administration for the second time in less than two years, having operated solely online since being bought in June 2020 by Torque Brands. The shirtmaker operated 150 shops before the pandemic. Administrators Interpath Advisory said that since the buyout the business had “continued to be negatively impacted” by pandemic restrictions on large events, office work and social gatherings which had reduced demand for its shirts. 50 jobs are now at risk. Tailor Gieves & Hawkes was put into liquidation in January and the shirt brand Pink was shut down by its owner, LVMH, in January last year, although it recently relaunched online.
 
Last week HSBC said it was closing 69 physical branches in the UK, but yesterday the bank announced it is buying a plot of virtual real estate in an online gaming space called The Sandbox, for an undisclosed sum. It is the HSBC's first major foray into the metaverse as it shrinks its UK branch network. The digital push will enable HSBC to engage with sports, e-sports and gaming fans via its slice of turf in The Sandbox, a virtual space majority-owned by Hong Kong-based Animoca Brands, Reuters says.
 
The owner of Burger King says the operator of its 800 stores in Russia has “refused” to close them. David Shear, the president of Restaurant Brands International (RBI), which owns Burger King and has operated its restaurants in Russia for a decade in a joint venture which includes Alexander Kolobov,said the company was attempting to withdraw from the Russian market following the invasion of Ukraine. He said in an open letter to employees: “We contacted the main operator of the business and demanded the suspension of Burger King restaurant operations in Russia. He has refused to do so, adding that the company’s “complicated” agreements with overseas partners meant it was unable to simply walk away from its Russia business. Any changes “would ultimately require the support of Russian authorities on the ground and we know that practically will not happen any time soon,” he said.
 
AstraZeneca is braced to abandon efforts to get its Covid vaccine approved in the US if it is simply "banging its head against a brick wall indefinitely" with regulators. The Telegraph quotes Sir Mene Pangalos, AstraZeneca's head of research and development, as saying the company did not need to "push [its Covid-19 vaccine] in places we are not needed or wanted".


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