Published: 21 March 2023
By Suzanne Evans, Director, Political Insight
Government borrowing was £16.7bn in February 2023, the highest February total since records began, largely because of spending on energy support schemes, the latest Office for National Statistics data released today shows. Public sector debt (excluding public sector banks) was £2,507.3bn at the end of February 2023, or around 99.2% of gross domestic product, a debt-to-GDP ratio not seen since the early 1960s. However, the interest paid on government debt was £6.9bn in February - £1.3bn less than a year earlier and dropping for the first time since April 2021.
Northern Ireland's Democratic Unionist Party (DUP) said yesterday it would vote against a key element of the Government's agreement with the European Union on post-Brexit trade rules. The so-called "Stormont brake" part of the Windsor Framework agreed last month enables Britain to prevent new EU laws applying to goods in Northern Ireland if asked to do so by a third of lawmakers in the province's devolved legislature. The DUP’s argument against it is that it does not apply to existing EU law. The vote is due tomorrow. However, DUP leader Jeffrey Donaldson said his party might yet be convinced to support it in future if additional concessions are made. The European Research Group (ERG) of pro-Brexit Conservative MPs is due to set out its verdict on the arrangement today.
Key players within the financial sector this morning unveiled plans to set out a blueprint to "kickstart" London's role as a post-Brexit global financial centre by 2030. The City of London said that Lloyd's insurance market, asset manager Schroders, auditor KPMG, Barclays bank and others will work on the roadmap to compete better with centres such as New York and Singapore. It will be presented to Britain's political parties in the autumn as they prepare manifestoes for a likely general election in 2024, Chris Hayward, the City of London's policy chairman, told Reuters. “What I feel is that there is no overarching vision and strategy for UK financial services," he said. "What it is not about is deregulation. I genuinely believe that good, proportionate regulation and good growth are two sides of the same coin,” he added. The financial sector accounts for around 12% of UK economic Although London remains the world's second most important financial centre after New York, Asian centres like Singapore are snapping at its heels. “Amsterdam's overtaking of London as Europe's biggest share trading centre since Brexit and the decision by UK chip designer Arm to only list in New York have added to the City's soul-searching,” Reuters says.
Landlords in London and the south east are facing a 125% increase in monthly mortgage payments, £574 on average, according to research shared exclusively with City A.M. London Money, an independent financial adviser specialising in mortgages, says the increase is due to the Bank of England’s decision to raise interest rates 11 times over the last 15 months, hence costs have spiralled. Director Martin Stewart said his firm had monitored its Buy-to-Let transactions for six months from last September, saying: “We wanted to see what the damage was looking like in real terms for those landlords coming off of historically low fixed rates.” A 50% increase in mortgage payments was noted in September last year, which increased to 77% in October, and then 87% in November, before hitting 125% in February. Stewart said the pressure would eventually fall on tenants as landlords sought to recoup their additional costs via rent increases.
Insurers are set to pay out £219m to Brits whose houses sunk into the ground due to the heatwave last year, new figures from the Association of British Insurers show. A total of 23,000 subsidence claims were made throughout 2022, including 18,000 of which followed the summer heatwave.
Rail signal workers and maintenance staff in the RMT union have voted to accept a pay offer from Network Rail, ending a long-running dispute over pay, jobs and working conditions. The RMT said the offer amounted to an uplift on salaries of between 14.4% for the lowest paid grades to 9.2% for the highest paid. Kate Nicholls, CEO at UKHospitality, described the decision as “encouraging news” for hospitality businesses, however, RMT members working for 14 train operating companies will still walk out on 30th March and 1st April.
Home improvement group Kingfisher has posted a 20% fall in profit from a record performance the previous year, and forecast a further fall this year. The B&Q and Screwfix owner made an adjusted pre-tax profit of £758m in the year to 31st January, down from the £949m made in 2022. Kingfisher said this morning it was comfortable with analysts' average forecast for adjusted pre-tax profit this year of £633m. The company blames rising inflation for reduced customer spending, and a softening in DIY demand since covid lockdowns.
Satellite launch company Virgin Orbit is working on contingency plans to file for insolvency should it fail to raise new funding, according to a report from Sky News. Restructuring firms Alvarez & Marsal and Ducera are said to be working with Virgin Orbit, which has been attempting to raise new funds after a failed satellite launch attempt from Spaceport Cornwall two months ago. Sir Richard Branson's Virgin Group holds a 75% stake in the firm and has ploughed approximately $1bn (£818bn) into the business since it was founded. Emirati sovereign wealth fund Mubadala is the other major shareholder. Boeing has also invested in the firm. On Thursday last week, Virgin Orbit announced it had halted operations and furloughed virtually all staff members while it searched for a cash lifeline, causing a 30% slump in its share price.
Power generator SSE is investing £100m in a Scottish pumped hydro scheme which could help boost the country’s energy storage capacity, it said this morning. The Coire Glas project, on the shores of Scotland’s Loch Lochy, could power about 3 million homes and in total will cost around £1.5bn to build, the company said.
UBS shares tumbled yesterday after it agreed to buy rival Credit Suisse for CHF 3bn (£2.67bn), in a deal that wipes out £13.96bn in bonds. UBS was 8.4% lower at CHF 15.68 (£13.95).
Amazon is planning to axe another 9,000 jobs worldwide, having already announced in January it was to cut 18,000 jobs, and close several UK warehouses and an Amazon Fresh store in London. CEO Andy Jassy told employees in a memo that workers in Amazon Web Services, HR, advertising and Twitch would bear the brunt of the cuts, which will take place over several weeks.
Two banks connected with the late Jeffrey Epstein will face lawsuits over claims they enabled his sex trafficking, a US court in the Virgin Islands has ruled. Two women who say the financier sexually abused them brought the case against JP Morgan Chase and Deutsche Bank. Both banks deny being aware of Epstein's abuses.
Bitcoin has benefitted from the banking crisis, soaring yesterday to breach the $28,000 (£22,952) mark. The global cryptocurrency market cap currently stands at $1.23tn, an increase of 2.4% since the crisis began, according to Coingecko data.
Why Media is an award-winning design, marketing, digital communications and PR agency offering tailored solutions to companies on a global scale. We have extensive experience in delivering design and marketing services to a spectrum of companies including professional services, property companies, financial institutions and shopping centres. We have offices in London UK, Hertford UK, Finestrat ES & Brescia IT.
Marketing Contact
Name: Claire White
E-Mail: claire@whymedia.com
Telephone: 01992 586 507
