Published: 15 April 2022
Location: London, UK
By Suzanne Evans, Director, Political Insight
The European Central Bank (ECB) confirmed plans to wind down its stimulus plan yesterday but decided not to follow central banks in the US and UK by increasing interest rates. The ECB kept its main policy rate unchanged at minus 0.5% and repeated its statement that the “calibration of net purchases for the third quarter will be data-dependent and reflect its evolving assessment of the outlook”. Once its bond buying program is completed, the ECB is expected to begin hiking interest rates, following the same path as the Bank of England and the US Federal Reserve. The ECB said: "Any adjustments to the key ECB interest rates will take place some time after the end of the Governing Council’s net purchases under the APP and will be gradual," it added. Inflation in the Eurozone hit 7.5% in March, against an ECB target of just 2%.
The Bank of England’s (BoE) quarterly credit conditions survey has showed that lenders plan to reduce the supply of mortgages on the market at the fastest pace since the onset the coronavirus pandemic amid concerns that borrowers will default on repayments as the cost-of-living crisis deepens. Lenders are warning they expect defaults to rise over the coming three months, Yahoo Finance UK reports. BoE's survey also found the margin made by banks on lending products narrowed in the first quarter. However, while lending in the property market is tightening, they still plan to step up provision of unsecured debt such as personal loans and credit card debt. Demand for both has increased in the past year and is expected to remain strong in the next three months.
Catering firms say they are struggling to produce nutritional meals for schools, hospitals and care homes as the cost of food staples surges and shortages intensify because of the war in Ukraine. One food wholesaler told The Telegraph that the price of chicken had jumped because Ukrainian workers at Polish poultry factories were leaving their jobs and returning home to fight the Russians. Poland supplies the UK with a significant amount of chicken and the disruption has caused prices to rise by about a fifth, the wholesaler said. Kym-Marie Cleasby, director of Sue Brady Catering in Wiltshire, also said on yesterday that the “huge” cost pressures meant her firm faced having to provide meals to primary schools at a loss. She told BBC Radio 4’s Today programme that strict government guidelines on the nutritional make-up of meals, and how much schools can pay for them, had left her company with “paper-thin” margins as she “can't really change too many of the dishes on the menu” because of the Government’s nutritional guidelines. She added: “The price of school meals is set by the Government, it hasn't changed for nine years, it hasn't been adjusted for inflation or anything else, and currently any margin in there to enable a company to carry on operating has been eroded.” Andrew Selley, chief executive of food wholesaler Bidcorp UK, separately warned that unless more is spent on school, hospital and care home meals, either their quality or quantity would have to reduce.
One in five British adults have been on a camping or caravan holiday since the pandemic began, according to market researchers Mintel. Of these about 4.5 million were sleeping in a tent or caravan for the first time, the firm estimated. Mintel also said that spending on these kinds of trips surged to £2.7bn in 2021, nearly 80% more than in 2020 when lockdowns decimated travel plans. The pandemic saw an influx of more affluent families on campsites, Mintel said. Almost four in 10 “Covid campers” had a household income above £50,000, compared with about a fifth of those who camped or caravanned pre-crisis.
British pharma giant GlaxoSmithKline (GSK) has announced an agreement to buy California-based cancer biotech Sierra Oncology (SO) for an approximate total equity value of $1.9 billion (£1.5 billion). The $55 per share cash offer represents a premium of 39% to SO’s closing price on Tuesday. The transaction is expected to close in the third quarter of 2022.
FTSE 100 bank Standard Chartered (SC) is quitting six African countries and shutting its consumer banking businesses in a further two to concentrate on more profitable markets. SC said it would close its operations in Angola, Cameroon, Gambia, Jordan, Sierra Leone and Zimbabwe as well as Lebanon, and stop offering consumer and business banking in Tanzania and Cote d'Ivoire to focus on corporate and commercial banking. SC will however continue to serve corporate clients in all these markets from its international network. The jettisoned markets generate about 1% of annual income and profit, Sharecast News says.
Elon Musk has made an offer to buy Twitter with a bid that values the company at $43.4bn (£33bn), an offer representing a 38% premium to the closing price of Twitter's stock on April 1, the last trading day before the TeslaCEO's 9.2% investment in the company was publicly announced. The billionaire said that he did not have confidence in the company’s management and that it needed to undergo changes that could not happen without it being purchased. He said that he might sell his existing shareholding if the offer is not accepted. In a statement, Twitter said it will “carefully review” the offer. Musk then gave a TED Talk interview saying he'd like to lift the veil on the algorithm that runs on the platform, even allowing people to look through it and suggest changes. He also reiterated his stance favouring a more hands-off approach to policing the platform's content, saying: "I do think that we want to be just very reluctant to delete things and just be very cautious with permanent bans… think we want to really have, like a sort of obsession and reality, that speech is as free as reasonably possible," he said. Musk’s announcement inevitably caused consternation in some quarters. Saudi Prince Alwaleed bin Talal came out against the proposal, saying Musk’s offer was too low, a response that drew a sharp reply from Musk questioning Saudi Arabia's "views on journalistic freedom of speech." Typical of many responses was a tweet from Max Boot, a Washington Post columnist. "I am frightened by the impact on society and politics if Elon Musk acquires Twitter," he wrote. “He seems to believe that on social media anything goes. For democracy to survive, we need more content moderation, not less". Nigel Farage, however, tweeted: "This is the best news for free speech in years!"
Meanwhile, The Independent has run a story claiming that Musk’s offer for Twitter of $54.20 is a “secret code.” The newspaper refers to his August 2018 announcement that he wanted to take Tesla private at $420 per share, a figure the US Securities and Exchange Commission claimed he had rounded up from $419 “because he had recently learned about the significance of the number 420 in marijuana culture.” The filing added a quote from Mr Musk, in which he said he thought his girlfriend, pop star Grimes, would find the price he had chosen “funny, which admittedly is not a great reason to pick a price.” Then, in December 2019, when Tesla stock hit $420 per share, Musk tweeted “the stock is so high lol.” And in 2020 Tesla changed the price of the Tesla Model S sedan to $69,420. The origins of 420 in marijuana culture are not exactly clear, April 20, or ‘420’ is a day recognised by marijuana smokers as “Weed Day.”
WhatsApp has launched a new “communities” feature that allows you to message thousands of people at once, The Independent reports. Until now, WhatsApp groups have been limited to 256 people, added using their phone number, with the intention that everyone in a chat knows each other. The new Communities tool fundamentally alters that, with the intention of making WhatsApp something closer to a social network in which a much larger group of people can chat and share information. This could be all the parents at a school, for instance, or all the staff in a workplace or people in a neighbourhood, the newspaper says.
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