Business News 15th September 2017

CPA hopes to inform, with its daily bite-size business news on Friday 15th September 2017, filled with stories we think will interest Business people.

Markets Round up

UK markets were broadly flat yesterday morning ahead of the BOE rate decision. But boy did the BOE put the cat among the pigeons! Whilst rates remained unchanged the Bank hinted that rates would likely rise in the “the coming months”. These comments were seen as hawkish causing the pound to soar and stocks to drop back with the FTSE 100 index nudging back down to levels not seen since the middle of August falling 1.14% to 7295.39 while the FTSE 250 fell 0.3% to 19,523.9 . Sterling was over 1 % higher against both dollar and Euro at 1.34 and 1.126 respectively as investors bought into sterling on the anticipation of higher rates. Oil continued its recovery with WTI above $50/Barrel for the first time since July and Brent up to 55.4. European  stocks were tepid with the Eurostoxx 50 & 600 rising 0.1% to 3526.48 and 381.79, weighed down by weaker mining stocks. Attention then turned to the US markets which closed lower overnight with the S&P500 down 0.1% to 2495.62 and the Nasdaq fell 0.5% to 6429.1, with investors growing concerned at the possibility of tighter monetary policy from the Federal Reserve following the release of strong inflation data. Most indices in Asia picked up the US baton and were moderately lower this morning, not helped by North Korea launching another missile test. Gold prices inched up as the t missile launch over Japan triggered safe-haven buying to $1327.

The Bank of England

Bank of England signalled that it might take back some of its stimulus relatively soon; “in coming months” to be more exact, leading at least a few economists – but not all – to the conclusion that a hike in Bank Rate might be on the cards for as soon as next month. As expected in financial markets, the Monetary Policy Committee announced that the decision to keep Bank Rate unchanged had been taken by a vote of 7 to 2. Regarding the outlook for Bank Rate, policymakers at the BoE said that if activity continued to follow the path outlined in the August Inflation Report, then “all MPC members continued to judge that […] monetary policy “could need to be tightened by a somewhat greater extent over the forecast period than current market expectations.”


German Finance Minister Wolfgang Schaeuble said in a newspaper interview that the European Central Bank needed to be very cautious when ending its ultra-loose monetary policy to prevent a nervous reaction from financial markets. After buying more than 2 trillion euros worth of bonds since 2015, the ECB is expected to announce next month it will slow the pace of its purchases, since economic growth is accelerating and inflation is stable, albeit sluggish. “The exit from extraordinary monetary policy needs to be approached very cautiously so that financial markets do not react over-nervously,” Schaeuble said in an interview with Passauer Neue Presse newspaper.


Prime Minister Theresa May will have to listen to lawmakers who oppose her Brexit legislation, Leader of the House of Commons Andrea Leadsom said, acknowledging the premier’s weakened hand after she gambled on a snap general election and lost her majority in Parliament. “This government will have to listen: even if it didn’t want to listen, it will have to,” said Leadsom, who last year was May’s final challenger in the party’s leadership contest. “The government is listening very carefully to suggestions right across the house on how we can make sure that Parliamentarians feel comfortable with the way we’re going to be scrutinizing the legislation on the Brexit bills.” Leadsom’s conciliatory tone followed a week in which May has faced criticism for sidelining Parliament. On Tuesday, she passed a measure to load committees of lawmakers with members of her governing Conservatives. And on Monday, she won a vote on her key piece of Brexit legislation, which controversially would give ministers sweeping so-called Henry VIII powers enabling them to bypass parliament and make changes to EU laws as they’re converted into British ones

US Inflation

US consumer prices rose more quickly than expected last month on a spike in gasoline prices. Headline CPI was up by 0.4% versus July and by 1.9% in comparison to the same month of one year ago, according to the Bureau of Labor Statistics. Economists had projected a rise of 0.3% on the month and 1.8% over the year. At the so-called ‘core’ level, CPI was ahead by 0.2% on the month yet the year-on-year rate of change was steady at 1.7% on the year. The cost of services outside of energy was up by 0.4% on the month, driven by higher prices for shelter and transportation. In comparison to a year earlier, they were up by 2.5%. Core commodity prices on the other hand were again lower, dipping by 0.1% on the month and 0.9% in annualised terms.


North Korea is back in focus after they shoot another missile over Japan, causing Japan to warn residents to take shelter. The missile is believed to be an inter-mediate missile compared to an inter-continental missile and is a suspected strike in retaliation to the most recent sanctions passed on North Korea , in a move that Japanese Prime Minister Shinzo Abe condemned as “outrageous.”. The sanctions placed on North Korea now restrict 90% of their exports. The United Nations Security Council has planned an emergency meeting in the wake of North Korea’s firing of a second missile over Japan. The closed-door meeting at 3 pm New York time was called at the request of the US and Japan, said the Ethiopian UN mission, which holds the council presidency this month. The agenda cites “Non-proliferation/DPRK” as the main item to be discussed. DPRK stands for the Democratic People’s Republic of North Korea, the nation’s official title.


The bid by 21st Century Fox to buy Sky will be referred to competition regulators in the “coming days”, Culture Secretary Karen Bradley has confirmed. The deal is facing a much fuller examination than initially expected. It will be assessed “on media plurality and genuine commitment to broadcasting standards grounds,” Ms Bradley said. The Competition and Markets Authority will provide its response within 24 weeks of the referral. James Murdoch, chief executive of 21st Century Fox, urged the government to approve the deal. “Remove the noise and get to the facts,” he said, speaking to the Royal Television Society Convention in Cambridge.

U.S. House passes $1.2 trillion measure to fund government

The U.S. House of Representatives on Thursday passed a $1.2 trillion bill to fund most government activities in the fiscal year beginning 1st October, knowing the Senate will disagree with many controversial elements and force a negotiation that could stretch into December. The bill, passed by a 211-198 vote largely along party lines in the Republican-controlled House, provides $658.1 billion for the Department of Defense and $44.3 billion for the Department of Homeland Security, including roughly $1.6 billion for construction of physical barriers along the U.S.-Mexican border.

Finance workers value flexibility

Pensions, healthcare schemes and flexible working are the benefits most valued by finance workers when applying for jobs, a survey by recruitment firm Reed has found. Three out of five candidates placed a benefits package above pay, including extra holidays and a company car.

Lib Dems would replace student fees with tax

Sir Vince Cable has revealed plans for a graduate tax to replace student fee loans. The Lib Dem leader suggested it was problematic that student loans were regarded as debt rather than as future income tax obligations. “I would quite like to convert it into something that is not just a graduate tax in practice but a graduate tax in name and form,” he said.

Tax harmonisation poses threat to Ireland

Seamus Coffey, head of the Irish Fiscal Advisory Council, has said EU plans to harmonise tax rules could cost the country €4bn (£3.6bn) in corporation tax. Mr Coffey was addressing the Irish parliament’s select committee for Budgetary Oversight, after European Commission president Jean-Claude Juncker said the EU must “act quicker and more decisively” on tax, and that the power of individual states should be reduced.

Slow councils shamed

Councils that fail to pass on cash from a £300m fund to help firms cope with higher business rates are to be named and shamed. Local Government minister Marcus Jones said most councils were too slow – and will be listed from next month.

Fifth of parents raid pension pots to help children

A survey by Prudential has found one in five parents have withdrawn money from their retirement fund to help their offspring. Some 19% of parents either took money from their pension pot or sacrificed savings for old age, while 10% said that helping their children had left them short of money.

HMRC needs more staff to handle Brexit work

HMRC’s chief executive has told MPs it will need thousands more staff to set up new trade arrangements at Britain’s ports and airports ahead of Brexit. Jon Thompson also warned that the Revenue will have to scrap other projects it is working on to devote more resources to Brexit.

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