Published: 15 June 2023
By Suzanne Evans, Director, Political Insight
The pound hit a one-year high against the US dollar on yesterday, trading 0.6% higher at $1.2685, its highest level since April 2022.
Prime Minister Rishi Sunak has scrapped plans to get supermarkets to impose voluntary price caps on basic goods after a backlash from retailers, the Telegraph said yesterday. The British Retail Consortium (BRC) argued such measures would not bring about any significant changes and at the time the idea was floated said the Government should focus on cutting red tape so resources could be "directed to keeping prices as low as possible," as opposed to "recreating 1970s-style price controls". The move was also criticised by veteran retail boss Stuart Rose, who currently chairs Asda.
Harriet Baldwin MP, Chair of the Treasury Select Committee has written to the Financial Conduct Authority (FCA) questioning its supervision of Odey Asset Management (OAM) and its founder Crispin Odey who is under investigation for sexual misconduct. He denies the allegations. The FCA began an investigation into the high-profile financier in 2021 and Baldwin has asked the regulator to respond to questions on the "nature and intensity" of its supervision and engagement with OAM over the last five years, asking it to clarify what it was aware of and whether it had taken any action against Odey or his firm following misconduct allegations. The letter also aims to ascertain how seriously the FCA takes “non-financial misconduct”. "Culture in financial services and the experiences of women in the industry are ongoing concerns of the Treasury Committee," she wrote, while demanding a response by 5th July.
In another blow to the London Stock exchange, We Soda, a chemicals producer owned by the Turkish billionaire Ciner family, scrapped its UK listing plan a fortnight after announcing its intention to go public, blaming an “extremely cautious” investor climate. We Soda reportedly wanted to raise £600m through a flotation, which could have valued the firm at more than £6bn. It would have been the UK's largest IPO so far this year and would have seen the company enter the FTSE 100. Last month the Cambridge-based microchip designer Arm Holdings decided to list in the US despite lobbying by the British Government to choose London; and earlier this year, building materials giant CRH said it would be moving its main share listing from London to New York.
Vodafone and CK Hutchinson, owner of mobile network Three, today announced their long-awaited UK merger. The new group, MergeCo, now the UK’s biggest mobile operator, was revealed this morning and is valued at £15bn, according to Sky News’ Mark Kleinman. "For Vodafone this transaction is a game changer in our home market," Vodafone CEO Margherita Della Valle said, adding that the deal is “great for customers, great for the country and great for competition”. MergeCo plans to invest £11bn in its UK 5G network which could in turn generate £5bn per year by 2030 as well as bolstering the digital transformation of businesses across the nation, City A.M. says. The broadband will extend to 99% of the entire population with data speeds six times faster by 2034. The terms of the deal allow Vodafone to eventually buy out the Hong Kong-based conglomerate if both parties agree.
British cinema chain operator Cineworld is preparing to file for administration as a part of a financial restructuring plan, Sky News claimed yesterday. The company is lining up AlixPartners to act as administrator to help with the transfer of ownership to its lenders and an announcement is expected by the end of next week, the report added.
The GMB trade union GMB said yesterday that 99% of warehouse workers at Amazon in Coventry have voted for six more months of strike over a pay dispute, after staging a walkout earlier in the day. They have already taken industrial action in January, February, March and April. The next strikes will be between 12th and 14th June.
Legal and General (L&G) has appointed Santander’s António Simões to be its next CEO from the beginning of next year, to replace the departing Sir Nigel Wilson. Simões has been Santander’s European regional head since 2020, leading the bank’s operations across the UK, Spain and Portugal. Before that he worked at HSBC as CEO of its UK and Europe business for 13 years.
After ten consecutive rises in an attempt to bring inflation down to 2%, the US Federal Reserve put the brakes on interest rate rises yesterday after the latest statistics put US inflation at a surprise low of 4%. US interest rates will for now stay at 5% to 5.25%, a high not previously seen since 2007.
European Central Bank rate-setters meet in Frankfurt to decide on monetary policy today. A further 25 basis point interest rate hike is anticipated, to take its main refinancing rate to 4% and that on the deposit facility for lenders to 3.5%.
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