Published: 08 June 2023
By Suzanne Evans, Director, Political Insight
The Financial Conduct Authority (FCA) has unveiled tough new marketing rules for companies trading in cryptoassets, including giving customers a 24-hour "cooling-off" period for the first time from 8th October. The FCA also said "refer a friend" bonuses for crypto buyers would be scrapped, and anyone promoting crypto would be required to put clear risk warnings on adverts such as: "Don't invest unless you're prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong." "It is up to people to decide whether they buy crypto, but research shows many regret making a hasty decision," Sheldon Mills, executive director at the FCA's consumers and competition division said. He added: "Consumers should still be aware that crypto remains largely unregulated and high risk". FCA research shows that estimated crypto ownership has more than doubled from 2021 to 2022, with 10% of 2,000 people surveyed stating they own cryptoassets. Crypto regulation is set to fall within the remit of financial watchdogs later this year when the Financial Services and Markets Bill completes its progress through Parliament.
In an announcement yesterday setting out a proposed tightening of procurement rules, the Government committed to publishing “a timeline for the removal of surveillance equipment produced by companies subject to China’s National Intelligence Law from sensitive central government sites”. Government departments were told last year to stop installing Chinese-linked surveillance cameras at sensitive buildings. TikTok was banned from Government phones in March this year, and in 2020 Huawei was banned from 5G network operations.
Fears there may be a raid on UK companies by foreign firms have so-far proven inconclusive, as data from the Office for National Statistics (ONS) released yesterday showed mergers and acquisitions (M&A) fell sharply in the first three months of the year as fear of recession, wild market swings sparked by the wake of war in Ukraine, and interest rate hikes, spooked dealmakers. Although foreign firms spent £12.7bn snapping up British business between January and March, which was £6.8bn higher than in the previous quarter, the value of inward M&A was £4.1bn less than in the same period in 2022. There were 141 transactions in January, 100 in February, and 114 in March, whereas there were more than 150 transactions in each month last year. The value of outward M&A (UK companies acquiring foreign ones) also fell. It was £2.9bn in Q1 (Jan to Mar) 2023, which was £7.2bn lower than in Q4 (Oct to Dec) 2022 (total £10.1bn) and £0.2bn lower than Q1 (Jan to Mar) 2022 (total £3.1bn. The value of domestic M&A was £1.8bn in Q1 2023 - £2.1bn lower than Q4 (total £3.9bn) and £2.6bn lower than in Q1 (total £4.4bn).
Starting salaries for permanent staff rose at the weakest pace since January 2021 as a broader pool of candidates contributed to a softer rate of increase in starting pay, according to the latest data from the closely watched Recruitment and Employment Confederation (REC) survey. Demand for staff fell to a five-month low as the rate of people looking for jobs increased at its fastest rate in three and a half years, the REC said. The increase in the number of job candidates came after a “marked fall” in permanent staff appointments, it added, noting that all four regions in the UK monitored by the report recorded a slowdown, with London’s hiring rate falling at the fastest pace.
Britain will host a global summit on artificial intelligence (AI) safety later this year, the Government says, but without giving a date for the event. In a statement released this morning, it was also announced that Prime Minister Rishi Sunak and US President Joe Biden will discuss AI technology during their meeting at The White House in Washington DC today. The summit will consider the risks of AI, including frontier systems, and discuss how they can be mitigated through internationally coordinated action, the statement said. US technology company Palantir Technologies, which already has more than 800 employees in Britain, will separately announce plans to make the UK its new European headquarters for AI development, the statement added.
There has been a "massive shift" in the way we do our grocery shopping since the pandemic, analyst firm Kantar has told the BBC. The cost-of-living crisis has also helped drive changes, as food prices soar. Shoppers now: visit the supermarket less often but spend more; spend more on own-label goods; and are turning to loyalty schemes to get discounts. The shift to online shopping has also slowed, with just 11.7% of UK grocery spending now online, down from a 15.4% peak in February 2021. Meanwhile sales at discount supermarkets Aldi and Lidl soared by more than 23% year on year in the 12 weeks to 14 May which, according to Kantar, shows they are here to stay. Last year Aldi overtook Morrisons to become the UK's fourth biggest supermarket.
Trade union Unite has announced that 2,000 security officers at Heathrow Airport in terminals 3 and 5, along with campus security, are to go on strike for a total of 31 days in June, July and August, peak travel season for the airport. Unite said the walkout would affect a number of airlines, including Virgin, Emirates, United and British Airways. Heathrow recently offered workers a 10.1% pay rise, but union members rejected this saying it was "below inflation," as measured against the retail price index, which currently stands at 11.4%. The more widely used consumer price index measure is now 8.7%. A spokesman for Heathrow said: "Unite has already tried and failed to disrupt the airport with unnecessary strikes on some of our busiest days, and we continue to build our plans to protect journeys during any future action. The majority of colleagues do not support Unite's strikes. There is a two-year inflation-beating pay rise ready for colleagues if only Unite would allow them to have a say."
Suppliers are cutting ties with Asos because insurers are reducing or withdrawing trade credit insurance following a slide in earnings at the fast-fashion retailer, The Times reported yesterday.
Allianz Trade is understood to have withdrawn cover entirely, while Atradius has reduced cover, the newspaper said, citing a number of unnamed suppliers, one of whom said they weren't delivering "as insurance has been lost". Another said it had yet to supply the retailer this year, and wouldn't do so again "until they get credit insurance backing. Credit insurance protects suppliers against the risk of their customers going bust in between them accepting an order and receiving payment. A long-standing part of the supply chain, if cover is not available suppliers will often ask for payment before fulfilling an order, or simply not deal with that retailer. An Asos spokesperson said: "While trade credit insurance cover has been tightening across the retail industry, we have seen no impact on our trading." Asos was demoted from the FTSE 250 last week.
Vodafone and Three owner CK Hutchison are reported to be in the final stages of agreeing to merge their British operations. According to Reuters, an announcement is expected as soon as Friday on the deal, which will see Vodafone owning 51% and Hutchison 49%, achieved by adjusting the ownership of debt rather than exchanging cash. Including debt, the deal could be valued at around £15bn, and will create Britain's largest mobile operator with some 27m customers, overtaking BT's EE and VM O2, owned by Telefonica and Liberty Global.
Harbour Energy is in merger talks with US rival Talos Energy, according to Reuters, which says the two have been holding on-off talks for around six months. Harbour is the UK's largest North Sea oil and gas producer and Talos operates in the Gulf of Mexico. Citing one unnamed person familiar with the matter, Reuters said a deal would give Harbour the opportunity to list in New York. Harbour is looking to diversify overseas and scale back its UK investments, after the Government imposed a windfall tax on British oil and gas producers. It launched a review of its operations in January, and in April told staff it expected to cut around 350 onshore jobs because of the levy. Harbour has a market value of around £2bn, while Talos is valued at around $1.8bn (£1.45bn). Terms have not been confirmed, however, and the sources told Reuters there was no certainty a deal would be reached. Neither company has commented on the report.
Fashion retailer M&Co, which closed all 170 of its High Street shops earlier this year at the expense of an estimated 1,900 jobs, is re-launching online on 21st June. There are no plans to bring M&Co’s High Street presence back.
A major Turkish chemicals producer is set to be the first blockbuster float of the year in London, The Daily Mail reports. WE Soda is said to be seeking a stock market listing this year in a deal that could value it at between £6bn - £7bn. The company is the world’s largest producer of natural soda ash which is used to make glass, detergents and soaps and batteries for electric vehicles.
Dr Jonathan Adnams, the Chairman of Adnams brewery, has said in the companies’ annual report and accounts that last year was “at least as challenging' as having to endure the pandemic. He said trading was initially strong in early 2022 following two difficult years, but the firm had then suffered from rising interest rates, soaring inflation and industrial unrest. Turnover at the Suffolk-based company increased by £7m to £64.2m in 2022, but the improvement was weaker than hoped given lockdown restrictions were in place on its venues for much of the previous year, Adnams said. Losses narrowed by just £114,000 to £1.5m, due partly to the firm's cost base climbing by £4.9m during the final nine months of the period because of rising prices of goods like barley, which is a key ingredient in beer. Adnams also announced it will not be paying a final dividend to shareholders.
Yahoo Finance UK reports that supermarket bosses are being paid hundreds of times more than what the average worker takes home. Sainsbury’s CEO Simon Roberts’ pay package is worth almost £5m, while and is 229 times the salary of the average Sainsbury’s worker, who typically earns £21,635, according to its annual report. Workers at Morrisons, meanwhile, will have to work for approximately 225 years to earn the £4.17m CEO David Potts earned for 2020-21. At Tesco, boss Ken Murphy took home £4.44m while his staff earned around £22.5k on average; and Marks & Spencer’s co-chief executives each took home more than £2m in pay last year, while the average M&S worker took home £24k, with the lowest paid getting £22k. This means Kate Bickerstaffe earned approximately 94 times more than a store worker and Stuart Machin made about 105 times more. Finally, Yahoo Finance cites Chairman of John Lewis Sharon White’s £1.15m pay package, which according to the annual report was “49 times the average basic pay of non-management partners calculated on an hourly basis”. John Lewis’ rules limit the pay of the highest paid partner to no more than 75 times the average basic pay of non-management partners.
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