Published: 29 November 2022
Prime Minister Rishi Sunak said yesterday that the so-called "golden era" of relations with China was over in his first major foreign policy speech, in the City of London. Britain's approach to China needed to evolve as Beijing was "consciously competing for global influence using all the levers of state power," he said, adding: "Let’s be clear, the so-called 'golden era' is over, along with the naive idea that trade would lead to social and political reform," an argument that had been made by former Chancellor George Osborne in 2015 when David Cameron was PM. "We recognise China poses a systemic challenge to our values and interests, a challenge that grows more acute as it moves towards even greater authoritarianism," he said, referring to a BBC statement that one of its journalists had been assaulted by Chinese police. A planned meeting between Sunak and China's President Xi Jinping at this month's G20 summit in Bali was cancelled, and last week the government banned Chinese-made security cameras from sensitive government buildings.
European stock markets were all in the red yesterday and the price of oil fell as anti-lockdown protests intensified in major Chinese cities. Brent crude dipped to $81 (£67) per barrel, while US crude was below $75 (£62) per barrel for the first time in some 11 months. Naeem Alsam, chief market analyst at Avatrade told Yahoo Finance: “Basically, it is demand that is creating the main issue for the price, and the fact that we have a potential recession threat and now the Covid issues in China, things are becoming difficult for oil traders. The reality is that no one wants to see more lockdowns in China, as a situation like this creates nothing but more headwinds for oil prices." Meanwhile, unrest at tech giant Apple's primary manufacturing hub in Zhengzhou will likely result in a production shortfall of almost 6m iPhone Pro units this year, the firm said. Also, Volkswagen's and FAW's plant in the Chinese city of Chengdu has halted production due to the rise in coronavirus cases in the country and two production lines at its Changchun plant are also on hold. Other plants are all stable, but the situation is volatile, a spokesperson was cited as saying by Reuters.
Part of the Online Safety Bill which proposed forcing tech giants to remove content that is "legal but harmful" from their platforms is to be amended amid concerns the move could have curtailed free speech. New online safety laws will now focus instead on the protection of children and on ensuring companies removed content that is illegal or prohibited in their terms of service. Previously, the government said social media companies could be fined up to 10% of turnover or £18m if they failed to stamp out harmful content such as abuse, even if it fell below the criminal threshold, and take legal action against senior managers. Digital Secretary Michelle Donelan said: "I will bring a strengthened Online Safety Bill back to Parliament which will allow parents to see and act on the dangers sites pose to young people". "It is also freed from any threat that tech firms or future governments could use the laws as a licence to censor legitimate views" she added. On Saturday, it was announced that a new criminal offence of assisting or encouraging self-harm online would be included in the Bill.
The Business, Energy and Industrial Strategy (Beis) committee has told the government it “is putting UK plc at significant risk by failing to take action in support of the semiconductor industry". The committee said Britain should cooperate with the USA under its CHIPS act, and engage with Taiwan, the world's largest manufacturer of advanced chips. MPs on the committee also recommended that ministers should engage with potential buyers to secure the future of Britain's most important microchip factory, Newport Wafer Fab in south Wales, after ordering current Chinese owner Nexperia to sell at least 86% of its shareholding in the firm earlier this month, citing the risk to national security. In response, the government said: "We are reviewing our domestic capabilities and working closely with industry and international partners to develop a new semiconductor strategy which will grow the sector further and make sure our supply chains remain resilient. Our strategy will be published as soon as possible."
UK retail sales slumped in November as consumers tightened their belts amid the cost-of-living crisis, according to the latest Distributive Trades Survey from the Confederation of British Industry (CBI). The CBI's reported sales balance declined to -19 from +18 in October, coming in well below consensus expectations of +2.
The Financial Conduct Authority (FCA) has ruled that financial advisers who wrongly advised former members of British Steel's pension fund to move their retirement savings into pension schemes which offered no guaranteed income will have to pay compensation to those affected by February 2024. More than 1,000 steelworkers are expected to receive £45,000 on average, based on the money needed to top up a personal pension to provide an income similar to what would have been received if they had remained in British Steel’s pension scheme. "We found that almost half the advice given to members was unsuitable – an exceptionally high level compared with other cases," the FCA said in a statement.
Rolls-Royce (RR) has successfully run an aircraft engine on hydrogen, a world aviation first that marks a major step towards proving the gas could be key to decarbonising air travel, Reuters reports. The ground test, using a converted Rolls-Royce AE 2100-A regional aircraft engine, used green hydrogen created by wind and tidal power, the British FTSE 100 company said. Together with commercial airline easyJet, RR is seeking to prove that hydrogen can safely and efficiently deliver power for civil aero engines, and is planning a second set of tests, with a longer-term ambition to carry out flight tests, with the ultimate aim of helping the aviation industry achieve its goal of becoming net zero by 2050.
Online fashion retailer Boohoo has become the largest shareholder in British makeup group Revolution Beauty, having raised its investment to around 26%. Meanwhilie, Revolution Beauty said yesterday that acting COO Bob Holt has taken over as CEO. His predecessor Adam Minto stepped down less than three weeks ago following an independent accounting enquiry, which led to trading in its shares being suspended on the London Stock Exchange. Meanwhile, Sky News says it understands that HSBC and NatWest, Revolution's main bank lenders, have asked Teneo Financial Advisory to monitor the situation, which arose when its auditor, BDO, refused to sign off its accounts, leading to a breach of one of the retailer's borrowing covenants with lenders.
BT Group has agreed to give a cost-of-living pay rise to all but its highest-paid workers. All UK colleagues earning £50,000 or less will be given a £1,500 pay rise from 1st January next year. This includes all frontline staff, and 51% of UK managers. The Communication Workers Union is recommending that its members accept the deal, saying it represents a 6% to 16% pay rise, depending on the pay grade. Up to 30,000 BT engineers and 10,000 call centre workers, including 999 call handlers, walked out last month in a dispute over pay. BT blamed the strikes for a drop of 89,000 broadband customers using its Openreach network in the three months to the end of September. Meanwhile, according to The Telegraph, BT is poised to combine its Global Services division with its Enterprise unit, both of which serve corporate clients, to cut costs. A senior industry source described BT's business-to-business operations as a "drag", adding that growth in its consumer division could not compensate for the decline. The source told the newspaper that a merger could take £10m to £20m of costs out of the business, although it is understood that no final figures have been agreed. A BT spokesman told the newspaper: "We know that there is some overlap of activities between our Global and Enterprise units, and we are working on ways to eradicate this."
RM has agreed to sell two non-core units within RM Technology for up to £16m. The London-listed company, which supplies technology and resources to the education sector, has conditionally agreed to sell the RM Integris and RM Finance Business to education support provider The Key. Completion of the sale is expected to take place in the first half of next year. Net proceeds from the sale will be used to reduce group indebtedness and strengthen the balance sheet, it said.
Retail giant Amazon could see its tax bill jump by as much as £29m in 2023 due to changes to business rates scheduled to come into effect across the UK, Sharecast News reports. According to Altus Group, Amazon is one among a number of firms set to face marked tax rises following Chancellor Jeremy Hunt's autumn statement, while flagship department stores and hotels may be able to shave millions off their tax bills as bricks-and-mortar retailers receive increased support when new rateable values, used to calculate business rates tax, come into effect from 1st April. Amazon's delivery warehouse in Longtown, Cumbria will see its rateable value surge by 145%, Altus says, with its overall business rates on track to rise as much as £28.75m in 2023 and cost the firm approximately £1000m in extra tax over the next three years. Altus also warned that smaller occupiers of industrial buildings and warehouses were at risk of financial collapse as heightened tax rises pile on top of already soaring costs.
Barclays CEO CS Venkatakrishnan is to undergo treatment for non-Hodgkin lymphoma at the Memorial Sloan Kettering Cancer Center in New York, with his condition labelled as being curable with the hospital's prescribed regimen. However, he said he will have to work from home "for some periods" and not be able to travel.
Crypto firm BlockFi has filed for bankruptcy in the US, becoming the latest company in the industry to go under following the implosion of crypto-exchange FTX. The company had already halted most activity on its platform, citing "significant exposure" to FTX having agreed a $400m (£332.23m) credit line from FTX earlier this year as the value of cryptocurrencies plunged. BlockFi said it was seeking court protection to restructure, settle its debts and recover money for investors.
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