Published: 27 June 2023
By Suzanne Evans, Director, Political Insight
Investment Minister Lord Dominic Johnson has been warned by The Payments Association (TPA) that Government plans to tackle push-payment fraud (APP) may make the UK “a less attractive destination for investment” and see “some companies leave our shores entirely”. APP fraud - which totalled £485m in 2021 - is when account holders are tricked into authorising payments to criminals. Around 80% of such fraud originates through online purchases. In a letter to the Minister, the TPA, which represents over 300 payments firms, said proposals being considered by the Payment System Regulator (PSR) to force banks and payments firms reimburse victims of APP fraud within five business days “might create more fraud than it reduces”, either by incentivising people to act carelessly or by encouraging ‘first party fraud,’ when two parties intentionally arrange a friendly scam to double their money. The letter also warned that account issuers could become more cautious in opening accounts for more vulnerable customers in order to limit exposure. The Payments Association also drew attention to the inaction of social media firms on fraud, and concluded by saying: “these latest anti-fraud policies, and many other regulations recently proposed and adopted by regulators of payments, will inflict damage on companies in our industry”.
May’s food inflation data as recorded by the British Retail Consortium (BRC) shows a dip on the previous month, but the annual 14.6% increase remains at historic highs. Food inflation was 15.4% in April. Fresh food went up by 15.7% in May, a decrease from the previous level of 17.2%. BRC CEO Helen Dickinson said: 'Households up and down the country will welcome the easing of shop price inflation in June. Food inflation slowed for the second consecutive month, particularly for fresh products, as retailers cut the price of many staples including milk, cheese and eggs. Clothing and electrical goods also saw falling prices, helping customers to pick up a bargain ahead of the summer holidays. 'If the current situation continues, food inflation should drop to single digits later this year.' However, Dickinson also warned the Government not to introduce a new packaging levy to combat plastic waste and a deposit and return scheme to boost bottle recycling. “It is imperative that Government does not hamper this progress by introducing costly new policies,” she said. Supermarkets will face allegations of profiteering as they are grilled by MPs on the House of Commons’ Environment, Food and Rural Affairs (EFRA) Committee today.
According to new research from wealth management firm Evelyn Partners, 32% of UK businesses believe there is a risk they will become insolvent in the next 12 months, down significantly on the 47% of firms that thought there was a risk of default back in September. The rosier outlook is despite the fact insolvencies reached a four-year high just weeks ago – The Insolvency Service reported a 40% surge in bankruptcies year on year, with over 2,500 firms declared insolvent in May.
Water industry regulator Ofwat has approved 33 investment schemes - costing £2.2bn and submitted by water companies - to improve water quality, reduce leaks and river pollution, and install smart metres. The first tranche of investments is set to begin in the next two financial years, from 2023 to 2025, with projects to be completed by 2030.
Vodafone and Three UK have dismissed concerns about national security that have arisen from their planned merger because of Three’s ties to China. Three UK is owned by Hong Kong-based CK Hutchinson Holdings. Conservative MP David Davis and Labour MP Apsana Begum have spoken of the “potential security implications” of the tie-up, and former Conservative Leader Sir Iain Duncan Smith has urged the government to scrutinise the deal closely. Earlier this month he said Three’s connection to China is “one of the big worries”. Commenting on the news, Vodafone told City A.M. that they “don’t believe there should be any security concerns about this merger”. “Like any similar transaction we’ll need National Security and Investment Act approval”, the telecoms giant said, adding that both the businesses “have worked closely with UK government to ensure their networks have the highest levels of security”. The firm’s UK CEO Robert Finnegan previously told The Times he did not see “any concerns at all” as the telecoms company already has operations in the UK.
“It’s a regulated industry and we work very closely with the national security bureaus across the country”, he added. The controversial deal, worth approximately £15bn, was announced two weeks ago, and if successful, would make the combined entity, named MergeCo, the largest network provider in the UK, potentially surpassing EE. Vodafone CEO Margherita Della Valle has said the deal would be “great for customers, great for the country and great for competition”.
London Overground will continue to be operated by Arriva for another two years, to May 2026, in an extension of its initial 7½ year contract. No monetary details have been released at the time of writing.
The Serious Fraud Office (SFO) has again delayed its decision on whether to charge any former employees of Glencore Energy UK with bribery offences, setting a new deadline for the end of this year. The SFO is investigating 11 ex-staff at the UK subsidiary of Glencore, the FTSE 100 miner in relation to its operations in West Africa. Last year, it admitted seven bribery offences related to paying – or failing to prevent the payment of – millions of dollars in bribes to officials in Cameroon, Equatorial Guinea, Ivory Coast, Nigeria and South Sudan. At the time, the court heard how Glencore employees and agents used private jets to transfer cash to pay bribes to officials in Cameroon and South Sudan. Glencore was ordered to pay a total fine of £276.4m for what the trial judge described as "endemic" corruption.
Money transfer company Wise has announced a 73% increase in annual income, in the sum of £964.2m, driven by higher interest rates. Pre-tax profits came in 234% higher, to £146.5m for the year to 31st March 2023, up from £43.9m the previous year. Wise also reported a 34% jump in active customers this morning, attracting 4.5m new customers, taking the total customer count to 10m. In total, those customers moved £105bn across borders internationally, a 37% year on year increase. The firm’s shares on the London Stock Exchange are trading some 20% higher this morning.
Telecom Plus (TP) – which trades as Utility Warehouse – has also announced record revenues and profits this morning. TP, which offers a one-stop-shop for landline, broadband, electricity and gas services, has seen its customer base rise by 22%, to 886,579, in the 12 months to March 2023. The FTSE 250 firm said revenues soared 155% during that time, rising from £967.4m to £2.48bn, with profits up 55% from £61.9m to £96.2m. It also reported a 24% increase in number of services supplied to 2.8m, up from 2.3m. Its multi-service offering provided up to £30m in collective savings for customers, it said.
Fintech firm CAB Payments is eyeing a £850m plus valuation when it floats on the London Stock Exchange next month. The firm, which specialises in payments services for emerging markets, said it would look to float in July with a price of £3.35 per share.
Mike Ashley's Frasers Group has increased its stake in electrical retailer AO World for a third time to more than 22% and also lifted its stake in rival Currys, according to stock exchange filings on Monday. The company, which owns Sports Direct and House of Fraser among other chains, spent £75m buying just under 19% of AO earlier this month, buying them from scandal-hit hedge fund Odey Asset Management. A few days later, Frasers Group increased its holdings to just over 21%. The latest move consolidates its position as AO's largest shareholder, ahead of Camelot Capital Partners which holds 20.4%. The stake in Curry's was lifted to 9.83% from a previous 8.9%.
An investment firm led by former Chancellor George Osborne raised its stake in Ocado a day after shares jumped by almost a third on rumours of a takeover by Amazon, the Daily Mail reports. Lingotto Investment Management, backed by Italy’s mega-rich Agnelli family and chaired by Osborne, took its holding to 5% on Friday, filing documents revealed. Meanwhile, it has been revealed that Rachel Osborne, the recently departed CEO of fashion group Ted Baker, is joining the Ocado board as a non-executive director. She will also serve on the grocery delivery group's audit committee and people committee, starting in September. Rachel Osborne worked previously as CFO at Debenhams and Domino's Pizza, and had senior roles at John Lewis.
Car manufacturers must pay compensation for fitting diesel vehicles with illegal emissions controlling devices, even if they had not done so intentionally, Germany's highest federal court ruled yesterday. The ruling stated compensation between 5% and 15% of their diesel vehicles’ sale price should be paid to customers, a decision that could potentially cost Volkswagen, Audi, Mercedes-Benz and others many millions of euros. The ruling overturned previous rulings because of a European Court of Justice decision that owners were owed compensation in cases where the damage to plaintiffs was caused by negligence. It was now up to carmakers to prove that their so-called defeat devices were functional and not illegal, the Judge said. Asked about the ruling, Volkswagen told Reuters its defeat devices were not illegal and as such it was convinced courts would continue to reject any compensation claims.
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