In the latest leak ahead of the Autumn Statement on 17th November, Chancellor Jeremy Hunt will “announce a tax raid on inheritance,” the Telegraph said yesterday. Hunt and Prime Minister Rishi Sunak have agreed to freeze the threshold above which people must pay inheritance tax for another two years, hence the resulting fiscal drag will force more people into paying it. Wealth manager Quilter says the move could raise an additional £1bn, depending on the rate of inflation. In 2009 only 2.7% of estates paid death duties, but that has risen to nearly 4%. In 2019-20, the latest year for which data exists, 23,000 families paid death duties. The newspaper also said the pension lifetime allowance will be frozen for a further two years, opening up people to higher tax payments on their lifetime savings. Meanwhile, The Times reported yesterday that pensions and benefits will rise in line with inflation to ensure the budget is seen as "fair and compassionate" despite the £11bn cost.
Defence Secretary Ben Wallace has announced that Britain will not now be building a new royal yacht to act as a ‘soft power’ influence to promote business and trade interests overseas. In May last year former Prime Minister Boris Johnson signed off on the new flagship, saying it would be a symbol of Britain's "burgeoning status as a great, independent maritime trading nation" following its departure from the European Union. The idea was that the ship would host trade shows and negotiations, but tendering of contracts had not been completed. Wallace said he would instead be prioritising building ships to detect threats to cables on the seabed in order to protect national infrastructure.
The Telegraph says Prime Minister Rishi Sunak is poised to announce a major natural gas deal with the United States. He hopes about 10 billion cubic metres of liquefied natural gas (LNG) will be promised by the US over the coming year, the report said, adding that discussions about the deal are in their final stages and an announcement could come in a week or two. However, wrangling over the exact amount continues, and it was possible that a specific figure would not be given when the deal is publicised, the newspaper said. It was also unclear how much of the gas sold to Britain by US companies will be in the UK energy system this winter. Earlier this year, the US agreed to supply 15 billion cubic metres of LNG to the European Union to help it cope with the energy crisis caused by Russia's invasion of Ukraine.
The Financial Conduct Authority (FCA) has told Parliament’s Treasury Select Committee that regulating consultants who advise pension funds may ensure a greater focus on managing risks such as the recent difficulties with liability-driven investment (LDI) funds which led to the Bank of England stepping in to buy gilts. Currently, consultants hired by pension funds to advise on LDI funds do not need to be regulated. "Perhaps if their advisers had been more sensitive to dealing with levels of stress like this, some of that risk would have been managed more effectively," FCA CEO Nikhil Rathi told MPs yesterday, echoing a call from the Bank of England who said earlier in thet day that data reporting on leverage in funds is needed, along with international action to regulate “non-banking”. However, Rathi said it was hard to know if the turmoil seen in the gilts market could have been avoided had pension fund consultants been regulated, given that what happened was "wholly exceptional".
Figures from Barclaycard - which sees nearly half of the nation's credit and debit card transactions – suggest consumer spending rose 3.5% in October, however some sectors fared better than others. Spending on essential items, such as fuel and groceries, increased 5.7% year on year, steeper than September's growth (3.3%), and reflecting the impact of rising inflation, according to the report. Supermarket shopping grew 4.6% - 1.8% higher than last month as the cost of food continued to rise. while fuel spend rose 17.7% year on year - 6.6 percentage points higher than last month's uplift (11.1%). Pharmacy, health and beauty stores also grew 3.8% in October - considerably higher than last month (0.8%) – and spending on home improvements and DIY, also saw improvement in October, with its smallest decline (-1.2%) in eight months. However, the hospitality and leisure industries continued to struggle. Although it grew 10.2%, this was the smallest uplift for the category since March 2021, and spending on restaurants contracted -11.3%, and entertainment slipped -1% into decline in October. Spending on utilities has also slowed as households begin receiving discounts from the government's Energy Bills Support Scheme. Public transport saw its smallest rise since March 2021, in all likelihood due to recent rail strikes, as well as office workers choosing to cut back on commuting and work from home more in a bid to save money.
Nearly 1,000 workers at FTSE 100 packaging firm DS Smith have voted for strike action in a row over pay, according to the GMB union, which said 93% of workers at the company voted in favour of industrial action which will take place across five sites in England and Scotland. DS Smith has offered a 3% consolidated increase plus a non-consolidated payment of £760 for 2022-23 which, with inflation at 12.3%, represents “a massive real terms pay cut” for members, the union said. GMB National Officer Eamon O'Hearn said: "DS Smith members worked through the pandemic, helping keep the company afloat through troubled times. It turns out that the company was hugely profitable during the pandemic, now they need to company to step up and help them through the cost-of-living crisis”. A strike at DS Smith could have serious implications across a range of household names -not least Amazon which gets packaging from the company,” he added.
The owners of Liverpool FC have said they are open to offers, raising the prospect of the club being sold. The Fenway Sports Group (FSG), which also owns the Boston Red Sox, bought the club in 2010, before it won the Premier League in 2019-20 and the Champions League in 2019. In a statement FSG said: "There have been a number of recent changes of ownership and rumours of changes in ownership at EPL clubs and inevitably we are asked regularly about Fenway Sports Group's ownership in Liverpool. FSG has frequently received expressions of interest from third parties seeking to become shareholders in Liverpool. FSG has said before that under the right terms and conditions, we would consider new shareholders if it was in the best interests of Liverpool as a club”.
Shares in gift card company Appreciate Group surged almost 60% yesterday after agreeing to be bought by payments firm PayPoint in an £83m deal. Appreciate’s brands include Love2shop, highstreetvouchers.com, and Park Christmas Savings. PayPoint said it has a well-established technology platform, more than 400,000 customers, and significant headroom for growth across the consumer and corporate gifting, prepayment reward and incentivisation markets. It also pointed out that the sector is a large and growing market in the UK, with an estimated value in excess of £8bn a year.
London-listed DWF, a provider of integrated legal and business services, has agreed to buy Canadian law firm Whitelaw Twining for up to £28m. In 2021, Whitelaw Twining generated revenue of CAD34.5m (£20m).
CVC Capital Partners, the private equity backer of Six Nations Rugby, is said to have approached IWG, the FTSE-250 company previously known as Regus, about acquiring The Instant Group, its digital arm. IWG is Britain's largest serviced offices provider, and such a deal could trigger a broader break-up of the group, according to Sky News. The newscaster said CVC is among a number of buyout firms which have approached IWG, and that banking sources said that Tim Rodber, The Instant Group's CEO, had been marketing the business to a number of private equity firms in recent weeks following a string of unsolicited approaches. Wells Fargo is said to have been hired to advise IWG on the potential disposal. Sky suggests a deal could be worth in the region of £1.5bn, larger than the current market value of IWG, which has seen its shares more than halve during the last 12 months as investors' express concerns about demand for offices during an economic downturn, and IWG's bigger-than-expected half-year loss of £70m, announced in August.
Frasers Group has launched a share buyback programme of up to 10m ordinary shares, worth £70m, with the programme due to end on 8th December when it reports its half-year results. Frasers is also rumoured to be among last-minute bidders for collapsed online sofa seller Made.com. Next is believed to also be interested.
Altilium Metals has announced plans to build the UK's largest electric vehicle battery recycling plant on Teesside. The multi-million pound investment is expected to create hundreds of jobs.
Fidelity Investments is set to release a zero-fee crypto exchange for retail investors, called Fidelity Crypto. The asset management company says the new platform will allow investors to buy and sell bitcoin and ethereum in the Fidelity Investments app, and said: “A meaningful portion of Fidelity customers are already interested in and own crypto."
Irish airline Ryanair posted its largest ever profit for its key summer season yesterday, and said it expected very strong passenger and fare growth for years to come as customers switch from higher-cost rivals. However, it also warned Europe's recovery remained susceptible to shocks from Covid-19 and Russia's invasion of Ukraine, and said aircraft delivery delays from Boeing could hit its capacity next summer. Europe's largest by passenger numbers, earned €1.371bn in the six months to the end of September, the first half of its financial year, well ahead of its previous first-half record of €1.29 in 2017.
Last week, Twitter cut nearly 3,700 jobs after Tesla owner Elon Musk completed his $44bn takeover of the social media platform, and this week Meta CEO Mark Zuckerberg is beginning thousands of layoffs following a sharp slowdown in growth. The Wall Street Journal cited people with knowledge of the matter as saying that the job cuts could come as early as Wednesday and that the company has already told employees to cancel non-essential travel from this week. During its last earnings call in late October, Zuckerberg said: "In 2023, we're going to focus our investments on a small number of high priority growth areas. So that means some teams will grow meaningfully, but most other teams will stay flat or shrink over the next year. In aggregate, we expect to end 2023 as either roughly the same size, or even a slightly smaller organization than we are today". In June, the Facebook owner abandoned plans to hire at least 30% more engineers, and warned employees to brace for an economic downturn.
Apple says it expects lower shipments of its iPhone 14 Pro and iPhone Pro Max due to Covid-19 lockdown restrictions being inflicted on an assembly facility in Zhengzhou, China. At a news conference on Saturday, Chinese health officials vowed to continue with the country’s zero-tolerance approach to Covid cases, despite Chinese exports falling in October for the first time since the start of the pandemic, because of the policy. Exports shrank 0.3% in dollar terms compared with a year earlier, according to Chinese customs data. Economists had forecast growth of 4% and the surprise drop follows expansion of 5.7% in September.
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