Business News 6th June 2017

We hope you enjoy reading the business news compiled by the Credit Protection Association on Tuesday 6th June 2017 for its members and visitors.

This is Worst time to experiment with Corbynomics

The Daily Telegraph’s Mathew Lynn says 2017 would be the worst time to experiment with Corbynomics. It seems that every day a new tax comes out of the Labour camp – corporation tax rises, a Robin Hood tax for the City, higher income tax for those earning more than £80,000 – but they “have not quite gotten around to creating a higher tax band for anyone with an MBA or a one-off levy on Ocado deliveries,” says Mr Lynn. “But then it’s only Tuesday”. With the economy set to undergo a period of transformation as it pivots away from Europe, Mr Corbyn and Mr McDonnell are offering policies that failed in the past and would bring catastrophic consequences for the UK, Mr Lynn concludes. Elsewhere, the Mail looks at how Labour’s “garden tax” will affect people, noting that an IFS warning that the total tax burden under Labour would be the highest since 1949. Finally, in a wide-ranging interview with the Telegraph’s Gordon Rayner, Theresa May laughs when asked about Sir Michael Fallon’s promise that high earners would face no tax increase if the Tories won. She says: “Michael is a Conservative, I’m a Conservative, the Conservative Party’s instinct always is to lower tax. We are a low tax party, we believe in lower taxes, we believe in people being able to keep more of their own money.”

The Daily Telegraph, Business, Page: 2   Daily Mail, Page: 18, 24   The Daily Telegraph, Page: 6

Professionals taking smart drugs to stay on top

The Telegraph reports on the widespread use in academia of so-called smart drugs to boost performance. Drugs such as Modafinil, Ritalin and Adderall are thought to work by improving neurotransmitters to manipulate the prefrontal cortex at the front of the brain and improve planning and problem-solving tasks. But academics are not the only ones using such drugs to enhance performance. Cambridge University Professor Barbara Sahakian says: “In Silicon Valley there are a lot of these drugs being taken and a lot of micro boosting to improve productivity. The same in the city of London where people have to keep at the top of their game.” She adds that perhaps we should consider whether we want “to move to a 24/7 society where we work and compete all the time or do we want to consider our quality of life?”

The Daily Telegraph

Scottish economy lagging

Scotland’s economy is “stuck in the slow lane” and is expected to deliver below-par growth this year, with investment required to restore it to health, according to the EY Scottish Item Club 2017 summer update.

The Scotsman, Page: 36

Newer rivals attack RBS small business lending plan

UK challenger banks have written to the European Commission arguing RBS’s plan to boost competition in the small business lending market is flawed as it focuses on moving business current accounts to other banks, rather than lending.

Financial Times, Page: 21

Pensions gap far wider than gender earnings disparity in EU

The gap between women and men’s pensions in the EU is more than twice the gap between their earnings – 40% to 16% – according to research by Mercer.

Financial Times, Page: 8    

Consumers holding back on non food sales

The latest survey by the British Retail Consortium and KPMG found over the three months to May, non-food sales, such as clothing and furnishings, dropped by 0.3%. However, demand for food has been tastier with sales over the period rising by 3.2%. KPMG’s Paul Martin commented: “The impact of inflationary pressures on the nation’s purse continues to play out in this month’s figures”. Separate figures from the car industry show the number of new cars registered in May fell 8.5% year on year to 186,265, according to the SMMT.  However online trading is at an all time high and spending on entertainment rose 12%, driven by double-digit growth in cinemas (11.5%) and restaurants (11.7%).

The Guardian, Page: 22    The Times, Page: 45   Daily Mirror, Page: 50   Daily Mail, Page: 16    The Independent, Page: 57   Daily Express, Page: 47    The Press and Journal, Page: 36    Yorkshire Post, Page: 6   

 Election and spending worries weigh on services

The Markit/CIPS purchasing managers’ index (PMI) for services fell to 53.8 in May, from 55.8 in April, as the election and a spending squeeze weighed on the services sector. “Despite slower growth [for services] in May, the surveys indicate that the economy has regained some momentum in the second quarter,” said IHS Markit economist Chris Williamson.

BBC News   Financial Times   Evening Standard, Page: 37   Independent i, Page: 40   The Daily Telegraph, Business, Page: 3

The election and markets

If Labour does prevail and pull off an election shock, exporters and global corporations could benefit if sterling declines, according to Bloomberg’s Justina Lee. Likely losers would be defense companies, utilities and perhaps Sky Plc. In the event May secures the landslide polls once suggested she could, Lee points to analysts who say the defense industry and home-builders would do well. Utilities could again suffer.

bloomberg on Labour bloomberg on Tories

J P Morgan Warning

J P Morgan Chase executive Vittorio Grilli warned overnight that it’s still “very hard to see a very peaceful outcome” from the Brexit negotiations. The bank’s chairman of corporate and investment banking in Europe, Middle East and Africa told Bloomberg’s Stephen Engle that the “subject matter is very, very delicate” and that “there are major, major principles at stake.” JPMorgan economist Malcolm Barr on Monday tried to frame what different election results would mean for the Brexit talks. In a report to clients, Barr suggested that May’s reliance on a small group of advisers implied if the Tories win a majority of 50 or more she might be emboldened “in an approach which threatens a more disruptive Brexit process” while reducing the likelihood of parliamentary defeat. A smaller majority would allow the House of Commons to exert more constraint, he said. As for Labour, a government led by it would likely mean the EU extends the deadline for Brexit beyond March 2019 to offer it time to prepare for the negotiations, said Barr. He predicted Corbyn would eventually seek membership of the European Economic Area, alongside Norway.

British Airways

The boss of British Airways’ parent company says that human error caused an IT meltdown that led to travel chaos for 75,000 passengers.

BBC News

Average UK rents fall for first time in more than seven years

Average UK rents have fallen for the first time in more than seven years, with London seeing the biggest decline, according to new data.The typical new rent in London has fallen by 3% in a year. The slowdown in the rental sector mirrors a similar picture in the housing market, with figures showing that property prices have fallen for the third month in a row.


New Cars

Sales of new cars fell 8.5% in May from a year earlier, with buyers cautious in the run-up to the general election, the Society of Motor Manufacturers and Traders (SMMT) has said. The SMMT said 186,265 new cars were registered in May. But sales of alternatively fuelled cars rebounded after falling in April. They now have a record 4.4% market share. More than 1.1m new cars have been registered this year to date, down 0.6% on 2016.

Job placements

Permanent job placements in the UK grew at the fastest pace in just over two years in April, the Report on Jobs compiled by the Recruitment and Employment Confederation and IHS Markit showed. The number of people placed in permanent jobs increased notably in May and the rate of expansion was the fastest for 25 months. Temporary or contract staff placements also rose at a steeper pace, and recorded the strongest rate of growth since March 2015.

Asian Markets

Asian markets traded narrowly mixed, following the lower close on Wall Street and as markets digested the impact of diplomatic tensions between Qatar and other Middle Eastern nations.

U.S. Markets

U.S. equities closed slightly lower, but held near record levels, while shares of Apple declined on a rare downgrade.


Oil Prices fell about 1 percent, on concerns that the cutting of ties with Qatar by top crude exporter Saudi Arabia and other Arab states could hamper a global deal to reduce oil production.


Gold hit a six-week high on, buoyed by disappointing U.S. jobs data on Friday and the U.S. dollar weakened ahead of a UK national election and a European Central Bank meeting scheduled for Thursday.

Previous News pages

Business News 5th June 2017

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Business News 1st June 2017

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