Published: 17 May 2023
The Financial Conduct Authority (FCA) says the number of adults in Britain who missed payments on domestic bills or failed to meet any of their credit commitments in three or more of the six months to January rose to 5.6m from 4.2m in May 2022. Sheldon Mills, executive director of consumers and competition at the FCA, said the research highlighted the "real impact" of the rising cost of living. The financial regulator began collecting the data in May 2022 after Russia's invasion of Ukraine sent the cost of energy and food soaring. The FCA survey also showed a significant rise in the number of people struggling to keep up with payments - now one in five adults, or nearly 11m people.
The £2 bus fare cap in England has been extended again until the end of October, the Government has announced. The cap applies to more than 130 bus operators outside London. As things stand, it will now rise to £2.50 in November for 12 months, before being reviewed again.
A report from Responsible Finance says community lenders saw a 22% increase in customers last year as ever-larger numbers were excluded from the traditional financial sector. Community development finance institutions (CDFIs) increased total lending by 20% in 2022 to £248m, reaching 94,744 customers, the trade body said. The majority of CDFI lending (£117m in 2022) went to ‘social enterprises’. A further £81m was lent to 3,230 start-ups and small businesses, helping to create 8,120 jobs. 99% of the businesses which borrowed from CDFIs in 2022 had previously been declined by another lender, Responsible Finance noted.
The Renters’ Reform Bill, which proposes abolishing “no-fault evictions,” is being introduced to Parliament today after numerous delays. The bill will also expand the Decent Homes Standard – which sets the minimum health and safety standards for social housing – to the private sector, and make it illegal for landlords to block people from renting properties because they rely on Government benefits. A new will also be appointed to resolve disputes between tenants and landlords. Levelling Up Secretary Michael Gove has hailed the proposed reforms as a “new deal” for the private rented sector, saying the Bill will tackle the injustices suffered by renters “living in damp, unsafe, cold homes, powerless to put things right, and with the threat of sudden eviction hanging over them”. However, the Bill has been labelled a “war on landlords” by some Conservative MPs, hence Gove has been quick to point out the Bill also supports “the vast majority of responsible landlords who provide quality homes to their tenants”. Landlords will have more powers to kick out “anti-social” tenants, he says, and notice periods will be reduced in cases where tenants have breached their tenancy agreements or caused damage to the property. The National Residential Landlords Association welcomed the steps to make it easier to recover property from anti-social tenants, but complained that the bill still lacked important details on the changes to the new eviction rules.
The Treasury Committee has issued a report recommending that trading in cryptocurrencies be regulated as gambling, rather than a financial service, given the extent to which they are can be used by fraudsters. “With no intrinsic value, huge price volatility and no discernible social good, consumer trading of cryptocurrencies like Bitcoin more closely resembles gambling than a financial service, and should be regulated as such,” the report concluded. Large parts of the cryptoassets industry “remain a wild west," Harriett Baldwin, chair of the Treasury Committee said. Around 10% of UK adults hold or have held cryptoassets, according to official figures. The Government is currently planning fresh regulation for cryptocurrencies which are currently largely unregulated, with trading subject only to anti-money laundering laws. Both The Financial Conduct Authority and Andrew Bailey, Governor of the Bank of England, have repeatedly warned consumers they could lose all of their money invested in cryptocurrencies. The Treasury Committee has issued the same warning in its report, and also criticised now abandoned plans for the Royal Mint to create a non-fungible token (NFT). However, the BBC says it has been told by the Treasury that the department does not support using gambling regulation to control cryptocurrency trading. The risks posed by crypto were "typical of those that exist in traditional financial services and it's financial-services regulation - rather than gambling regulation - that has the track record in mitigating them", BBC News was told by an official.
Carmaker Stellantis says it will be unable to keep its commitment to make electric vehicles in the UK unless changes are made to the current Brexit deal. Stellantis, one of the world's biggest automakers whose brands include Vauxhall, Peugeot, Citroen and Fiat, had committed to making electric vehicles at its Ellesmere Port and Luton plants two years ago, but said proposed changes due to take effect next year, which stipulate 45% of an electric car’s value should originate in the UK or EU to qualify for trade without tariffs, could not be met by the firm because of the rise in the cost of raw materials during the pandemic and the energy crisis. It urged the government to reach an agreement with the EU to keep the current rules till 2027, or else "trade between the UK and EU would be subject to 10% tariffs”. "If the cost of electric vehicle manufacturing in the UK becomes uncompetitive and unsustainable, operations will close, " Stellantis said, because manufacturers “will not continue to invest” and will relocate instead. As evidence of this, Stellantis cited Honda’s closure of its Swindon site and fresh investment in the US. A Government spokesperson told the BBC it is "determined" the UK will remain competitive in car manufacturing. Stellantis employs around 5,000 people in the UK.
Gas and electricity firms E.On Next, Good Energy and Octopus Energy have paid a combined £8 million in compensation for failure to produce final bills within six weeks, as required when a customer switches to another provider, Ofgem says. The energy watchdog also revealed more than 100,000 households were affected after the three suppliers either missed or delayed compensation payouts due to such failures. Under rules brought in three years ago, customers are entitled to a £30 payment each if a final bill is not produced in six weeks, with a further £30 due if the compensation is not provided within another 10 working days.
Pubs and restaurants group Marston’s is to sell off another 60 pubs across the UK to reduce its debts. This is on top of the 61 already being sold by the Wolverhampton-based group, which has raised its hopes for proceeds from sell-offs to £55m- £65m, up from an initial £15-20m. The group currently operates 1,440 pubs and employs 11,000 in Britain, and has recently seen an increase in revenue as post-covid socialising gathers pace. Marston’s said drink sales continue to perform well and food sales were encouraging, demonstrating the trading resilience of its predominantly community-based pub estate. CEO Andrew Andrea said that Marston’s was on track with its Back to a Billion strategy, which aims for £1bn annual turnover by 2026.
Online fashion retailer Boohoo saw its shares rally yesterday, despite reporting a £91million pre-tax loss in the year to the end of February as sales fell and freight, energy and staff costs rose. Group revenues fell 11% to £1.77bn, with UK sales down 9%. However, with the results being slightly better than analysts expected, shares soared up to 16% in early trade, ending the day almost 7% up. Boohoo owns brands including Debenhams, Karen Miller, Nasty Gal and Pretty Little Thing, and reassured investors yesterday that trading is set to improve in the current financial year. Despite yesterday’s rally, Boohoo shares are still some 48% down on the year.
JD Sports says it expects annual profit to pass £1bn after a record year to 28th January. Revenue at the FTSE 100 sportswear firm rose to £10.1bn, up from £8.6bn in the previous year. The retailer’s long-time executive chair and CEO Peter Cowgill, who build JD Sports into a global brand, was forced to step aside in May last year following governance concerns, and the disclosure that after it emerged that he was paid almost £6m in bonuses despite the company accepting more than £100m in Government Covid support. Cowgill was replaced by current CEO Regis Schultz.
Danny Malone, the CEO of Amigo Holdings appointed last autumn, has resigned. The subprime lender is in the process of being wound down, following a mis-selling scandal in which it was forced to cease trading, and then became unable to secure finance when given the go-ahead to continue lending (with a new focus on mid-cost loans) by the Financial Conduct Authority.
The Bank of England's Chief Economist, Huw Pill, has apologised for using "inflammatory" language suggesting people need to accept they are poorer as a result of rapidly rising inflation, and saying people needed to stop asking for pay rises because this risked keeping inflation higher for longer. His critics included his own boss, BoE governor Andrew Bailey who said ill's "choice of words was not right". "If I had the chance again to use different words I would use somewhat different words to describe the challenges we all face," Pill said, adding: "Although we have some difficult messages to bring. I will try and bring those messages in a way that is perhaps less inflammatory than maybe I managed in the past”.
Switzerland’s largest bank, UBS Group AG was rushed into buying failed cross-town rival Credit Suisse Group AG in a deal it did not want, a regulatory filing with the U.S. Securities and Exchange Commission has showed. Reuters reports that UBS told investors it had less than four days to conduct due diligence given the "emergency circumstances" and estimates a hit of some $17bn (£13.61bn) from the takeover. Credit Suisse's involvement in a series of corporate collapses ultimately triggered a run on the bank, accelerated by fears of a broader banking crisis, causing Switzerland's central bank to offer liquidity assistance, before announcing UBS would buy Credit Suisse for 3 billion Swiss francs (£2.68bn). The final price was raised from an initial 1 billion Swiss francs (£890m), the filing showed.
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.