Business News 28th June 2017

We hope you enjoy reading the business news compiled by the Credit Protection Association on Wednesday 28th June 2017 for its members and visitors.

Market Round up.

The FTSE100 made back most of its losses by the close of play yesterday after touching 7411 earlier in the day. The index was strengthened by the movement in the mining stocks with Anglo American trading up over 4% , BHP Billiton up over 3% and Rio Tinto over 4%. The price of Oil continued to rally yesterday after dipping into a bear market with West Texas Intermediate Crude trading over $43.75. European shares fell, as a drop in auto stocks after Germany’s Schaeffler cut its profit outlook and disappointment over a failed buyout of Stada offset gains among basic resources firms and Spain’s Bankia. Asian shares eased in the Asia-Pacific region after overnight declines in the U.S. and Europe on worries the European Central Bank would reduce monetary stimulus. U.S. shares closed lower as large-cap technology shares fell more than 1%, while a Senate vote delay raised heighten policy uncertainty. Oil prices were steady to lower after a report of rising U.S. fuel and crude inventories underscored concerns that a three-year supply glut is far from over. Gold firmed as the dollar struggled and shares weakened after a vote on U.S. healthcare reforms was postponed and European Central Bank President Mario Draghi hinted the ECB could trim its stimulus this year.

Ransomware

Another huge cyber attack has struck across Europe, spreading to U.S. and Asia, affecting businesses and government systems with ransom demands. The new ransomware attack, in a possible reprise of a widespread WannaCry assault in May, is said to be caused by the virus linked to malware called Petrwrap or Petya. The affected users are told to pay $300 in cryptocurrency per infected computer to unlock their systems. The organizations in Russia and the Ukraine were the most affected. Kaspersky Lab analysts reportedly said that about 2,000 users had been attacked in North America. Russian oil giant Rosneft PJSC, advertiser WPP and Ukrainian government ministries were all hit by the attacks. The site of the former Chernobyl nuclear power plant was also hit, forcing scientists to monitor radiation levels manually.

Capital requirements raised for UK lenders

The Bank of England has has increased the capital buffer on UK lenders amid concerns about spiralling consumer borrowing, ordering banks to put aside an extra £11.4bn to deal with any future economic slowdown and to prepare for tighter rules on credit card lending. The annual estimate of banks’ potential losses in a hypothetical recession has been brought forward from November to September and banks ordered to toughen up affordability checks on mortgage borrowers. The Financial Stability Report from the Bank’s Financial Policy Committee notes concerns that low unemployment and strong economic growth may have made banks complacent.

The Daily Telegraph, Business, Page: 1 The Times, Page: 39 The Guardian, Page: 22

House Prices rebound

UK house prices bounced back in June after three months of falls, according to mortgage lender Nationwide. House prices rose by 1.1% during the month after falling by 0.2% in May. But Nationwide economist Robert Gardner warned that “monthly growth rates can be volatile, even after accounting for seasonal effects”. The average price of a house in the UK rose by £2,590 to £211,301. Annual house price growth edged up to 3.1% from 2.1% in May

Coffee chain Ice contains faecal bacteria

Samples of Iced drinks from three of the UK’s biggest coffee chains has been found to contain bacteria from faeces at levels which an expert described as worrying according to a BBC investigation that will air in Watchdog tonight at 8pm.

bbc news

Yellen urges Soft Brexit

On a visit to the UK, Janet Yellen, the US Fenderal Reserve chairman, has urged the UK to maintain its deep ties with the EU and pursue a soft Brexit.

FCA

The FCA, the UK financial regulator, has called for a radical shakeup of Britians 7 trillion pound investment market in a bid to stamp out conflicts of interest and restire investors trust in the asset management business.

Workers polish accountancy skills

A study by Groupon has found that almost a third of workers have taken measures to boost their skills through extra training in the past five years, with courses on accounting and administration amongst the most popular. A survey of 2,000 adults by the online discount marketplace reveals one in five of those taking extra training used their lunch hour to learn new skills and a similar number said they had been rewarded with a pay rise or promotion. Groupon said many people were motivated by a desire to protect themselves from automation due to fears their current job may become obsolete. This chimes with a study by PwC which indicates millions of British jobs are under threat from robots. It found that artificial intelligence could be worth £222bn to the economy by 2030, and that up to 30% of workers – or about 10m people – could be affected.

Independent i, Page: 22

Public opinion turning towards tax rises

The latest British Social Attitudes survey suggests that for the first time in a decade, more people think that taxes should rise to fund higher public spending. Some 48% of those questioned said that taxes should rise and the government should spend more, compared with 44% who believe they should stay as they are. Only 29% of people want cuts in public spending, down from 35% ten years ago.

The Times, Page: 2 The Guardian, Page: 11 Financial Times, Page: 3 Daily Mail, Page: 22 The Scotsman, Page: 2 Yorkshire Post, Page: 4

Ministers set up business advisory group on Brexit

The Government has announced that it is setting up an advisory group to ensure that business is given a voice over Britain’s approach to Brexit. The new body was confirmed by Business Secretary Greg Clark, who told lawmakers he has met with workers, businesses and local leaders around the country and investors around the world since last year’s referendum decision to leave the EU. The group will be led by Philip Hammond, David Davis and Mr Clark. Other members of the group include representatives from the Institute of Directors, the British Chambers of Commerce, the CBI, the Federation of Small Businesses, and the EEF.

Financial Times, Page: 3 The Times Bloomberg

Mobiles are replacing bank branch visits

The average consumer will visit a bank branch just seven times a year at present. This is forecast to fall to just four times a year by 2022. People are switching to bank apps to checlk balances and make payments and this is expected to more than double over the next five years

BBC news

Businesses urged to hire more disadvantaged apprentices

David Pinchin, chairman of social mobility charity Leadership Through Sport & Business, has called on more businesses to offer apprenticeships to disadvantaged young people. The charity offers a four-month pre-apprenticeship training programme and a year paid placement with major firms in the financial sector, including Deloitte and EY.

Evening Standard, Page: 18

State pension means testing will be necessary, says report

The state pension will have to be means-tested, according to a report by the University of Kent, which suggests state pension payments should be limited for pensioners paying higher-rate tax from as early as 2019, as a way of tackling the increasing cost of pension benefits. The Government says an ageing population has led to it considering speeding up the current timetable of pension age rises.

Daily Express Financial Times

Comedy writer made millions from business videos

Sir Antony Jay, the writer of Yes Minister, left more than £4.2m in his will despite apparently having earned just £600 per episode for the 1980s political comedy. Sir Antony, who died aged 86 last August, is believed to have made his fortune from a company producing training films about business management, which he set up with John Cleese.

The Times, Page: 11