Business News 21st June 2017

We hope you enjoy reading the business news compiled by the Credit Protection Association on Wednesday 21st June 2017 for its members and visitors.

Yesterdays UK Market

The FTSE 100 gave up early gains following Bank of England Governor Mark Carney’s Dovish stance on UK interest rates, along with a sharp decline in oil prices. In early trading, the FTSE 100 rose to 7561.07, up 37.26 points, pulling back in the late morning trading to eventually close down 51 points at 7472. Despite UK inflation being above the BoE’s 2% target, along with 3 policy makers voting for a rate rise in the latest Monetary Policy Committee meeting last week, Governor Mark Carney today suggested that he is not inclined to raise interest rates at this time. This dragged Sterling weaker to trade at 1.261 against the Dollar and 1.1334 to the Euro. Additionally, oil prices fell c. 3% to seven-month lows as Nigeria, Libya and the US expect to report that supply is set to rise, despite an OPEC agreement to cut production. European stocks were also down as the price of oil hit energy and mining stocks.

Asian Markets

Stock markets were lower across the Asia-Pacific region overnight, as global price declines for oil hurt energy companies, though mainland markets were resilient after MSCI Inc. said it would include Chinese stocks in its emerging-markets index.

U.S. Markets

US stocks ended near their lows of the day, with several major sectors facing heavy declines. Energy stocks were among the biggest decliners, with the U.S. 500 energy index sliding 1.25 per cent. But the consumer discretionary, industrial and telecommunications sectors all experienced falls of greater than 1 per cent as well.

Chancellor of Exchequer goes soft

Chancellor of the Exchequer Philip Hammond hinted at a softer Brexit than envisaged by Prime Minister Theresa May as he outlined a business-focused “Brexit for Britain.” In a speech in London’s financial district, Hammond called for a Brexit deal that “puts jobs and prosperity first” and allows employers to “access the talent they need” if post-Brexit restrictions are imposed on immigration by EU citizens. He seemed to rule out Britain leaving the EU with no deal, which May and other ministers in her Conservative government have said would be acceptable if negotiations fail.

Humility & Resolve

The Queen’s Speech will be presented to parliament today. Yet the Government has not been formed. 10 days of talks between the Conservative and the DUP later, there is still no deal between the two parties. A senior DUP source warned yesterday that the party could not be ‘taken for granted’ and questioned Theresa May’s ability to negotiate deals, saying if the coalition agreement is not reached ‘what does that mean for bigger negotiations she is involved in?’

DUP leader Arlene Foster nevertheless confirmed that her party will vote with the Tories to pass the Queen’s speech. Mrs May is reportedly seeking to negotiate a so-called ‘confidence in supply’ deal with the Northern Irish party, which would mean that the DUP would throw their weight behind the Government in key commons votes.

Theresa May has promised to work with “humility and resolve” as she prepares to set out her legislative programme for the next two years in a Queen’s Speech expected to be dominated by Brexit. The programme set out by the Queen at Wednesday’s State Opening of Parliament will feature “a number of bills” geared towards making a success of Britain’s withdrawal from the European Union, the Prime Minister said. But she insisted that the rest of government business will not be put on hold during the Brussels negotiations, promising measures to build a stronger economy, protect consumers, tackle domestic violence and fix a “dysfunctional” housing market.

Audit standards unacceptable

Philip Fisher says the Financial Reporting Council’s latest review of the audits of the top six accountants “is a sad indictment of shoddiness.” He says to state that 81% of FTSE 350 audits reviewed in 2016/17 needed no more than limited improvements is spinning the report – the fact remains that “one in five audits needs noticeable improvement, which is a disgrace.” Mr Fisher adds that the target for next year that 90% of audits that are either good or require only limited improvements is not good enough and wonders whether those companies forced to accept substandard audits should be getting their money back.

Accounting Web

Lib Dems

Sir Vince Cable is back on the political stage and has confirmed he will be running to become a new Liberal Democrat leader. Sir Vince has been a senior figure in the party for more than 20 years and has previously served as deputy leader, acting leader, as well as business secretary. He spent five years in the coalition government. He is currently Lib Dem economic spokesman and is expected to emphasise his extensive economic and ministerial experience during the leadership contest. He has written on the Lib Dem website ‘There is a big space in British politics which I am determined that we should occupy. I am ready to commit my energy, enthusiasm and experience to the task of leading the Liberal Democrats through what will be a period of chronic uncertainty. With the prospect of another election looming large, we must be ready for the fight.’

Social mobility index published

A social mobility index for employers, revealing how City firms have diversified their workforce and invested in work experience and mentoring programmes, has been published. The first such index of its kind was compiled by the Social Mobility Commission, in partnership with the City of London Corporation. It ranks employers according to steps they take to attract and promote staff from poorer families, based on voluntary submissions from 100 organisations. David Johnston, chief executive of the commission, said: “While no one firm has cracked the issue and there is still progress to be made, they should be congratulated both for having prioritised social mobility and for being prepared to have their processes and practices independently scrutinised.”


Uber’s chief executive Travis Kalanick has resigned, it was announced this morning. The resignation follows a series of scandals, including sexual harrasment and sexism at the company. Last week Mr Kalanick announced an indefinite leave of absence, but pressures from investors meant that resignation was in order.

Mr Kalanick reportedly said, ‘I love Uber more than anything in the world and at this difficult moment in my personal life I have accepted the investors request to step aside so that Uber can go back to building rather than be distracted with another fight.’ Mr Kalanick, the founder of Uber, will remain on the companies board of directors.

Assets of $1.5tn wash up in British Virgin Islands

Offshore companies in the British Virgin Islands have more than doubled their assets since 2010 – to over $1.5tn. A report by Capital Economics found that about $15bn of tax revenue globally – $3.9bn of it in Britain – is generated by investments funnelled through the British Virgin Islands, which is “tax-neutral”. Lorna Smith, interim executive director of BVI Finance, who wrote a forward to the report, said: “Contrary to some accusations, the BVI is a sound and reliable centre which has worked harder than many bigger nations to meet international standards, and it is not a tax haven.” She adds that the BVI has made a “commitment to support development of a new global system for the systematic exchange of beneficial ownership information on a reciprocal basis”.


The Culture Secretary, Karen Bradley said that by next Friday she would decide whether Sky’s takeover by 21st Century Fox should be referred to full competition investigation. Ofcom gave Bradley its assessment of whether the acquisition by Rupert Murdoch’s Fox of the 61% of the UK broadcaster it does not already own would be in the public interest and filed a separate ‘fit and proper’ test of the company directors, while the Competition and Markets Authority (CMA) presented a report on jurisdiction. In March, Bradley issued a European intervention notice asking Ofcom to consider whether there would be “sufficient plurality of persons with control of the media enterprises; and whether the parties would have genuine commitment to the attainment in relation to broadcasting of standards objectives”.

Retirement won’t bring tax respite

Pensioners are handing over an average of £7,400 each year, or about a third of their income, in direct and indirect taxes. Analysis of ONS figures by Prudential shows that the total bill for the UK’s retired households in the 2015-16 tax year was £52.7bn. However, the average retired household income – including state pension, private pensions, benefits and other earnings – rose by around £1,200 to just over £25,000. The total tax for pensioners was four percentage points lower than the 34% paid by the average working household. Stan Russell, a retirement income expert at Prudential, said: “People planning to give up work should make sure they don’t underestimate the impact tax will have on their income in retirement.”

Daily Mirror, Page; 36

Carney: Not right time for interest rate rise

Bank of England governor Mark Carney has said the time is not yet right for a rate rise, with wage growth still falling and uncertainty over the impact of Brexit on the economy. Mr Carney warned that monetary policy “cannot prevent the weaker real income growth likely to accompany the transition to new trading arrangements with the EU”. But he said the Bank’s policy could influence how “the hit to incomes is distributed between job losses and price rises”. The pound fell about 0.4% against the dollar to trade at $1.2682 following his comments.


Oil prices fell, trading around multi-month lows as  investors discounted evidence of strong compliance by OPEC and non-OPEC oil producers with a deal to cut global output.


Gold inched up after hitting its lowest in five weeks in the previous session, it strengthened as equities fell and the U.S. dollar eased from one-month highs following a fall in crude oil prices.

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