NS&I 'throws down the gauntlet' to high street banks with a one-year fixed savings rate of 6.2%

The Government’s savings bank, NS&I, has ‘thrown down the gauntlet’ to high street rivals by launching a one-year fixed-rate savings account paying 6.2%. The record rate for recent times comes with a 100% Treasury guarantee, and covers investments from £500 to £1m.

The government has ditched proposals to add a ‘hydrogen levy’ to energy bills which would have added a further £120 charge on top of already near-record high costs. Energy Secretary Grant Shapps had proposed the levy to pay for hydrogen production, but he yesterday tabled an amendment to the upcoming Energy Bill, preventing it being paid for via energy suppliers and their customers, and levying it on the gas shipping industry instead, from 2025.

The FTSE underwent it quarterly reshuffle yesterday, meaning Marks & Spencer will re-join the FTSE 100 on 18^th September, after being out of the top stock index for the last four years. The iconic retailer has seen its share price increase by more than two thirds in the past year. According to analytics group FTSE Russell, drug makers Dechra Pharmaceuticals and Hikma Pharmaceuticals and products supplier Diploma will also join the FTSE 100 after seeing their shares rise in value. Meanwhile, housebuilder Persimmon has been demoted to the FTSE 250, along with insurance firm Hiscox, chemicals business Johnson Matthey, and investment group Abrdn, which has now lost its place in the FTSE 100 for the second time in just over a year.

Business confidence jumped 10 points in August to 41% its highest level since February last year according to the latest Lloyds Business Barometer. 56% of firms were confident in their own prospects, and 46% were optimistic about the wider economy, 27 points on the month before. All regions reported a positive reading in the month, with London doing particularly well, with the index rising 20 points during August to hit 52%, its highest level since May last year. Confidence among retail firms hit an 18-month high at 44% while among service firms it hit a 22-month high of 42%.

“The bounce in economic optimism this month is the standout point,” Hann-Ju Ho, senior economist at Lloyds’ commercial banking division, said. “Our analysis shows that businesses felt relief that interest rates may be reaching their peak, alongside hopes that measures to tackle inflation are having an impact”.

Car production rose again July, rising by nearly a third to mark the 6^th consecutive month of growth.  The latest figures from the Society of Motor Manufacturers and Traders (SMMT) showed 76,451 vehicles rolled off factory lines in the UK, with all electric makes of cars, including high-tech hybrid electrics and plug-ins, rising 73.9% to represent almost two in five cars made in the month.

The Federation of Small Businesses (FSB) is calling on the Government to do more for small enterprises and adopt a “risk-taking” approach to support them in absorbing the high cost of adopting new technologies, having found those businesses most fuelling the economy have less access to Government funding than corporate giants. The FSB ‘Tech Tonic’ report shows 70% of tech-savvy small ventures have integrated new tech innovations, generating a 15% revenue rise on average, however affordability is a major barrier to such innovation. For a small firm, the average cost of introducing new technology is £27,000 over three years, the trade body says. Hence it is recommending the government commit over half of direct R&D funding to SMEs and start a tax-relief scheme for businesses actively trying to ramp up their products and processes. Tina McKenzie, FSB policy chair, said “innovation must be for the many, not for the few”.

Think-tank the Tax Payers’ Alliance (TPA) written to every council leader in the UK asking them to pledge not to bring in a four-day work week, after its research indicated a four-day week could cost £30bn a year in lost working time. It will not, as claimed by proponents of the scheme, increase productivity by 25% but lead to “part-time town halls” the TPA says. The TPA first raised the alarm and launched a ‘Stop the Clock Off’, campaign following a row when staff at Lib Dem-run South Cambridgeshire District Council cut their hours by 20% for the same pay. Government ministers intervened in a bid to force the organisation to end the four-day week trial, citing worries over value for money. Now the TPA has expanded its efforts nationwide, and is warning artificial intelligence (AI) programs like ChatGPT could lead to four-day weeks and “French-style working practices”. John O’Connell, TPA CEO, said: “Residents are rightly worried that a part-time council could be coming to their town hall. As we’ve seen elsewhere, this experiment leads to poorer services, with taxpayers picking up the tab.” He added: “We hope council leaders will show their commitment to delivering value for money for ratepayers by signing our pledge.”

Leaseholders in London face soaring service charges which are “significantly greater than in the rest of England,” according to Office of National Statistics (ONS) data. Leaseholders in London pay on average £2,207 annually, a significant jump from the £1,740 average paid in 2021, and 32% more than the average leaseholder in England who currently pays £1,668 in service charges.

Workers at four London National Health Service Trusts will strike next month in a dispute over "safe staffing" and pay, Unite said this morning, adding the industrial action will involve over 2,800 workers, including nurses, pathologists, cleaners, caterers, porters and ancillary roles, at Barts Health NHS Trust, Barking, Havering and Redbridge University Trust, East London Foundation Trust and Guys and St Thomas.

Pret A Manger has been fined £800,000 after one of its workers got stuck in a -18C freezer for two and a half hours at the chain’s Victoria Coach Station shop on 29^th July 2021. She had to be treated for suspected hypothermia when she was found “in a state of distress” by a colleague. An investigation by Westminster City Council found there was no suitable risk assessment for employees working in temperature-controlled environments, despite several call-outs relating to defective or frozen push buttons in the previous 19 months, including one occasion at the same remote kitchen in January 2020 when a worker had become stuck in the walk-in freezer after being unable to open the door from the inside. The sandwich chain pleaded guilty to an offence contrary to the Health and Safety at Work Act 1974 at Westminster Magistrates Court on Tuesday. Councillor Aicha Less, deputy leader and cabinet member for communities, public protection and licensing said: “The shocking details of this case show a lapse of due care and attention…We hope the significant fine awarded in court acts to all businesses as a warning, preventing this from ever happening again”.

A deal to buy Wilko has failed to materialise in time, meaning redundancies at the retailer will now resume. M2 Capital said it made a £90m bid for Wilko, and would guarantee jobs for the next two years, but the private equity firm unable to provide proof of funding in time. PwC, which is overseeing the sale of Wilko, is believed to still be in talks with HMV owner Doug Putman about a deal.

The digital healthcare company behind the NHS funded GP at Hand app has placed two of its British businesses into administration, the Daily Mail reports. Babylon Health, whose platforms have been used by 700,000 people in the UK, had been championed by former Health Secretary Matt Hancock as ‘revolutionary’ and soared in popularity during the pandemic, providing digital health options for the public. Restructuring firm Alvarez & Marsal asaid late last night it had been appointed administrator for its UK holding company, as well as Babylon Partners, its research and artificial intelligence division. However, Babylon’s clinical services business, which includes it’s the GP at Hand app, has been sold solvently to US digital health business Emed Healthcare. Babylon, which was founded in 2013 by British-Iranian entrepreneur Ali Parsa, employs more than 650 people in Britain, according to Linkedin.

AIM-listed software giant Instem has been bought by French private equity firm Archimed SAS. Archimed agreed to buy the Staffordshire company for a cash offer of 833p a share, 41% than Instem’s closing share price on Tuesday, valuing the company at £203m. The sale will see another British firm leave the London Stock Exchange, where Instem had been listed since 2010.

Swiss banking giant UBS has delivered a second quarter pre-tax profit of $29bn (£22.79bn) from its takeover of Credit Suisse, the largest ever quarterly profit for a bank. These were the first results published since it officially took over Credit Suisse in June, and compare with $2.1bn (£1.65bn) in the same time period a year earlier. However, the sum mainly reflects $28.9bn (£22.01bn) in negative goodwill from the Credit Suisse acquisition, which recognises the amount extra it paid over the fair value of the assets. Underlying profits still failed to meeting analysts' forecasts. Excluding negative goodwill and any integration-related expenses and acquisition costs, pre-tax profits came in at just $1.1bn (£86m), which according to analysts at Citi, is some 28% below consensus forecasts. UBS said it made $2bn (£1.57bn) in profit from its own operations, while Credit Suisse reported pre-tax losses of CFH2.1bn (£1.65bn).

And finally… Does Burger King make its famous Whopper appear larger on its menus than it is in reality? A US judge has ruled it is up for a jury to decide, following the filing of a class action suit alleging the firm makes it look 35% larger and with more than double the amount of meat compared to what is actually served to customers, and includes a false image showing the burger with ingredients that "overflow over the bun". Burger King, a division of Restaurant Brands International, is refuting the claims, saying it is not required to deliver burgers that look “exactly like the picture”.