Published: 27 July 2022
Location: London, UK
By Suzanne Evans, Director, Political Insight
A fresh day of nationwide rail strikes has begun as some 40,000 RMT union members at Network Rail and 14 train companies have walked out over pay, jobs and conditions. Only 20% of train journeys are expected to go ahead today, and services will end at 6.30pm tonight. This means the last train from London to Edinburgh leaves at 14:00 this afternoon; the last London to Birmingham at 15:43; and the last London to Manchester train departs at 15:40. Blackpool, Portsmouth and Bournemouth are among places that will have no train services at all today. Further RMT strikes are planned for 18th and 20th August, and London Underground staff are planning to strike on 19th August. The Department for Transport said the RMT was "hell-bent on creating further misery for passengers across the UK," but the RMT accused Transport Secretary Grant Shapps of not allowing the rail industry to do a deal with the union. On Saturday, 30th July, 5,500 members of the train drivers' union Aslef will also walk out of seven railway companies.
The International Monetary Fund (IMF) has warned the UK is set for the slowest growth of the G7 economies next year. It is predicting UK growth will fall to just 0.5% in 2023, much lower than its forecast in April of 1.2%, and its 2.3% prediction in January. However, Britain is forecast to see a growth of 3.2% this year, above those of its biggest competitors including both France and Germany. Meanwhile, the IMF says the global economy has shrunk for the first time since 2020, hit by the Ukraine war and Covid-19. With growth stalling in the UK, US, China and Europe, it said the world "may soon be teetering on the edge of a global recession". The IMF has cut its 2022 global growth forecast to just 3.2% and warned the slowdown risks being even more severe.
European Union members have agreed to cut gas use by 15% in case Russia halts supplies, the BBC reports. However, countries not connected to the EU's gas pipelines, such as Ireland, Malta and Cyprus, would be exempt from any mandatory gas reduction order as they would not be able to source alternative supplies. Moreover, the voluntary agreement will only become mandatory if supplies reach crisis levels. Countries can also ask to be exempt if they exceed gas storage filling targets; if they are heavily dependent on gas for "critical" industries; or if their gas consumption has increased by at least 8% in the past year compared to the average of the past five years. The agreement comes after Russian energy firm Gazprom announced it had once again reduced gas flows into Germany to allow work on a turbine on the Nord Stream 1 pipeline. The pipeline, which pumps gas from Russia to Germany, has been running well below capacity for weeks and Russia has been accused of waging a "gas war" against Europe. Gazprom has cut gas supplies altogether to Bulgaria, Denmark, Finland, the Netherlands and Poland over their refusal to comply with a Kremlin order to pay their bills in roubles, instead of euros or dollars. European Commission President Ursula von der Leyen has said the prospect of Russia cutting off all supplies to the EU is a "likely scenario".
MPs on the Work and Pensions Committee (WPC) says deductions from benefit payments to recover debts should be paused to allow struggling households some breathing space. Debits to recover overpayments and arrears are taken automatically from more than 2 million Universal Credit claimants and often come without warning, therefore making life even harder for those trying to budget. In February, 20% of deductions were made to recover an overpayment, sometimes made because of a government error. The WPC report into the cost of living calls for deductions to be gradually restored when inflation reduces or if benefits are increased to accurately reflect the cost of living.
The Financial Conduct Authority (FCA) has confirmed plans to bring in a new consumer duty to set higher and clearer standards of consumer protection within the 60,000 financial firms it regulates. It will require putting customers’ needs first, a stipulation that includes taking customers no longer to make a complaint than to be sold a product; putting a stop to long waits on the phone; an end to rip-off fees; and making it as easy to switch or cancel products as it was to take them out in the first place. Firms will also need to provide clear, easily understandable information about products and services and ensure key information is not buried in lengthy terms and conditions. Financial product providers will also be required to focusing customers’ diverse needs, particularly if they are vulnerable. They will be required to abide by the rules for new and existing products by the end of July next year, while older – and often more complex - products that are no longer for sale, will be exempted from the new rules until the end of July 2024. The rules will not apply to buy now, pay later services and cryptocurrency businesses as these are not yet regulated by the FCA.
A report released by the Competition and Markets Authority (CMA) says more than 80% of recorded music is now listened to via streaming, and that there were more than 138 billion streams in the UK last year. MPs had demanded a "complete reset" of the industry, amid "pitiful returns" for artists, the BBC says, and called on the CMA to look into the power of the major players. The watchdog found that while more artists than ever before are releasing music – as streaming has made it easier not only for listeners to access music but also for artists to record and share it – only a small number of high-profile artists enjoy financial success. The majority make no substantial earnings at all, the CMA says, adding that a million streams per month would earn an artist about £12,000 per year. Separate analysis published by the Intellectual Property Office (IPO) shows the number reaching one million UK streams per month remains low, about 1,700. Spotify is believed to pay between £0.002 and £0.0038 per stream, Apple Music about £0.0059, and YouTube pays the least - about £0.00052. Musicians' Union general secretary Naomi Pohl said it was "disappointing" the "competition issues" in the streaming market "will not be explored fully by a CMA investigation". "The CMA's release today highlights what it sees as positive impacts of music streaming - but we feel they have failed to recognise the very serious problems posed to creators," she said.
The Competition and Markets Authority (CMA) has ordered digital bank Monzo to review the way it informs departing customers of their historic financial transactions, Sharecast News reports. Monzo was found to have breached the Retail Banking Market Investigation Order between May 2021 and March 2022 after the bank failed to send transaction histories to more than 13,000 customers, despite reporting a similar breach last year. It now has to make sure that every customer receives copies of their transaction history when they close their account, which acts as important evidence if they choose to apply for a loan or mortgage elsewhere. Adam Land, senior director at the CMA, said: "It's simply not good enough for a major bank like Monzo to repeatedly fail its customers by not following clear rules...We have ordered the bank to make changes which mean customers should not face this issue in the future. We'll be watching to make sure proper procedure is followed".
Lloyds Banking Group has posted a 6% fall in half-year profits to £3.7bn – down on the £3.9bn achieved in the same period last year - after it set aside £377m to cover a possible increase in loan defaults due to rising interest rates. Because of these, however, the bank also upped its full-year outlook and increased its interim dividend.
French satellite company Eutelsat Communications has agreed an all-share merger with UK rival OneWeb to create "a leading global player in connectivity". The deal values OneWeb at $3.4bn (£2.83bn). The UK government made a $500m (£415.55m) investment in OneWeb two years ago, and so “will now have a significant stake in what will become a single, powerful, global space company, working on the sound financial footing needed to make the most of the technological advantages it has to compete in the highly-competitive global satellite industry, against companies around the world," a government statement said.
ecommerce group THG said yesterday that Japanese conglomerate SoftBank will no longer buy a stake in the company for £1.1bn. Last year, SB Management- a division of Softbank - invested $730m in London-listed THG through a placing, giving it a stake of around 8%. At the same time, THG agreed to grant SB a call option to buy a 19.9% stake in THG Ingenuity, the technology division, for $1.6bn. However, the agreement has now been terminated by mutual agreement "in light of global macroeconomic conditions".
Office space provider Workspace Group has sold a medical centre in Newbury it acquired in May for £7.25m, which is says is a £1.15m premium to its March valuation.
Rolls-Royce has appointed former BP executive Tufan Erginbilgic to the role of CEO. He will succeed Warren East in the new year. East announced his intention to retire back in February.
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