Business News 29th June 2017

We hope you enjoy reading the business news compiled by the Credit Protection Association on Thursday 29th June 2017 for its members and visitors.

Markets Round up

The pound rose nearly 1% to three-week highs on the back of Carney’s rate hike signal causing the internationally focused FTSE100 to fall. The Bank of England Governor, Mark Carney said the Bank was likely to need to raise interest rates if business investment continues to grow and would debate this “in the coming months”. The FTSE100 closed down 46.6 points at 7387.8, having traded as high as 7445.3 while the more domestic facing FTSE250 fell only a quarter of a percent to 19476 . The pound rose to $1.2936  against the dollar. European stocks were flat and while European financials rose almost 2% after a report that investors have overreacted to ECB Chief Mario Draghi’s view on fiscal stimulus. US stocks made a strong move back to the upside during trading on Wednesday. The tech-heavy Nasdaq climbed well off its lowest closing level in a month rising 1.4% to 6234.41. The S&P500 rose 0.9% to 2440.69 lead by technology and also banks. Asian stocks also traded higher, taking cues from the stronger finish in U.S. markets. Oil prices rose for a sixth consecutive session on, as a decline in U.S. production underpinned the market that has been under pressure from a global supply glut. Gold prices rose as the dollar weakened for a second straight day following a global cyber attack and a delay to U.S. healthcare legislation


Tesco announced plans to cut 1,200 jobs at its head office as part of a major cost-cutting drive. The UK’s biggest supermarket told staff on about the cull, which amounts to a quarter of its workforce in Welwyn Garden City and Hatfield. Tesco is implementing a turnaround plan that aims to reduce costs by £1.5bn. The cuts come after the retailer said last week it would close a call centre in Cardiff at the cost of 1,200 roles. Tesco said it was a “significant next step” in the reorganisation of the company. The company has also asked the CMA to fast track its proposed merger with Booker.


Culture Secretary, Karen Bradley is to announce later whether 21st Century Fox will be allowed to complete its takeover of Sky. Ms Bradley asked regulator Ofcom to decide if the deal was in the public interest, especially around media plurality and broadcasting standards. Fox owns 39% of Sky, but wants to buy the rest, and assume total control of the broadcaster. The deal has been cleared by European Commission competition authorities.

Government urged to introduce tax rises

The former head of policy for David Cameron has suggested the government must consider tax rises and increased spending on public services to respond to pressure on social care, schools and the NHS. Oliver Letwin said most people were prepared to see a modest rise in tax bills to fund investment in public services. Editorials in the Times and the Sun both back calls for tax rises, but stress that the money will have to come from a broad base. However, the Telegraph takes the opposite view and says the Conservatives should be lowering taxes, not raising them.

EU considers new taxes to cover Brexit shortfall

The EU’s Budget Commissioner Gunther Oettinger says the bloc could bring in new taxes for EU members to fill the funding gap that will emerge when the UK leaves the bloc. The European Commission said the common corporate tax base or financial transaction taxes were amongst the sources of funding that could be used to plug the hole left behind by Brexit.

Supreme court date for Rangers ‘big tax case’

A final verdict on the Rangers “big tax case” will be delivered next Wednesday, the Supreme Court has announced. BDO, liquidators of oldco Rangers, were granted leave to appeal to the court over a ruling that the use of Employee Benefit Trusts broke tax rules.

Uber faces new pressure from crowdfunded VAT case

Uber could be forced to pay hundreds of millions of pounds in backdated VAT if it loses a crowdfunded case brought by tax barrister Jolyon Maugham QC, arguing that it is a service provider and therefore subject to the 20% levy.

Downing Street denies plans to scrap pay cap

Downing Street has insisted its policy on the 1% cap on public sector pay remains unchanged. A senior Number 10 source said yesterday that Theresa May had accepted that voters were “weary” of austerity and that the pay cap issue would be up for review in the Autumn Statement later this year. However, Downing Street later sought to dampen down the speculation, insisting current government policy had not changed.

Pound jumps on Carney’s rate rise hint

The pound jumped nearly 1% after Bank of England governor Mark Carney suggested that interest rates could rise if business investment grows. Sterling rose to $1.2936 against the dollar after Mr Carney said that “some removal of monetary stimulus is likely to become necessary.”

Tax software to blame for cyber-attack spread

A global cyber-attack that affected companies around the world may have started via corrupted updates on a piece of accountancy software. Fingers are increasingly pointing to a piece of Ukrainian tax-filing software, MEDoc, as the source of the infection, although the company denies it.

Britons bank on apps

A report by the British Bankers’ Association and EY has found almost 20m Britons banked on smartphone apps last year. Mobile transactions surged by 57% and some 38% of the adult UK population used a banking app in 2016.

Climate and building

Britain must reassess the way it designs buildings to cope with a warming climate, stepping away from huge expanses of glass and beyond air conditioning that consumes too much energy, a panel advising the government said. Parliament’s Committee on Climate Change, which draws members from all political parties, said a growing number of heatwaves is turning many modern glass buildings into greenhouses, overheating the people inside. Instead, planners should demand designs that cool buildings naturally, creating shade from trees, water features, heat pumps and breezes for ventilation.

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