Business News 30th June 2017

We hope you enjoy reading the business news compiled by the Credit Protection Association on Friday 30th June 2017 for its members and visitors.

Markets Round up

Global equities tumbled broadly while treasury yields surged as investors are preparing themselves to enter into an era of monetary stimulus removal. The UK markets were up yesterday morning on the  news that Mark Carney was mulling a rate rise.  HSBC hit multi year highs leading the charge. Miners were also up with Anglo American taking the lead. However by lunchtime the gains were petering out. Karen Bradley dealt  21st Century Fox a blow by failing to agree the merger saying she was “minded to refer” it to the Competition and Markets Authority (CMA) for a full investigation but gave the parties until 14th July to make their final representations before she made a final decision as to whether to refer the deal or agree. The UKs leading index  fell quickly in the afternoon section reversing gains to drop to day lows some 110 points below highs before finishing the daydown 37.5 points at 7350.3. U.S. shares fell as technology’s latest drop washed out strong gains from the big banks. Asian Markets slipped tracking an overnight decline on Wall Street. Strong Chinese manufacturing data failed to lift benchmarks in Hong Kong and Shanghai. Oil prices were on track for their biggest weekly gain since mid-May, ending five weeks of losses with prices underpinned by a decline in U.S. output. Gold steadied, supported by an easing dollar and falling equities even as comments from global central banks suggested monetary tightening in Europe and Canada.


Irish authorities have said they have clinched deals with more than a dozen London-based banks and finance houses to move some of their operations to Dublin in preparation for Brexit. As Dublin continues to battle with Frankfurt, Luxembourg and Paris for the Brexit spoils, the head of international financial services at Ireland’s Industrial Development Authority said definitive decisions had now been taken on an Irish location by these firms.

UK financial services Europe’s top location

The UK remains Europe’s leading financial services location for foreign direct investment (FDI), but sentiment is mixed, a new report says today. UK financial services attracted 99 FDI projects in 2016 – the highest level for more than a decade and up 5% on 2015, says EY’s latest survey of financial services’ attractiveness. But the lead over other countries is narrowing, with Germany recording a year-on-year rise of 18% (with 39 projects) and France 25% (with 25 projects). EY’s financial services chief for the UK, Omar Ali, said: “Despite last year’s referendum, UK financial services continued to attract record levels of investment. The UK remains a world-class place for financial services firms to do business. The talent, infrastructure, quality of life, plus deep capital markets and a robust regulatory system are hard to rival.” However, the City’s attractiveness as a place for international firms to do business fell from 74% to 62% with investors citing concern about access to markets and foreign talent after Brexit.

Apple pays £8m in tax on £1bn revenues

Apple’s company accounts show UK revenue rose by 2% to £1.024bn last year but the company paid just £8.12m in tax due to a 33% fall in operating profit to £19.2m. The tax bill is down from £9.43m in 2015. Margaret Hodge, Labour MP, and former chairwoman of the public accounts committee, said: “We have been exposing now for a number of years what these multinationals do. It’s completely artificial financial structures with no other purpose than to avoid tax. Apple needs the services that tax revenues provide. They are screaming for better internet and higher speed broadband but they won’t pay for it.”

Starbucks tax turnaround

Starbucks will pay nearly $22m in tax after it moved its European headquarters to London. The coffee chain said its taxable profit in its EMEA division had jumped by 92% to more than $90m in the year to October 2.

Financial Conduct Authority

Financial Conduct Authority (FCA) said it has delayed final conduct rules for UK firms providing contract for difference products, pending the outcome of the European Securities & Markets Authority’s discussions. Given progress in ESMA’s own consideration of the use of its product intervention powers in this area, the FCA said it has decided to delay making final conduct rules for UK firms, pending the outcome of ESMA’s discussions. ESMA has confirmed that the measures being considered take into account requirements that have been adopted, or publicly consulted on, by European Union National Competent Authorities.

Consumer Confidence

Consumer confidence in the UK tumbled in June, the latest survey from GfK showed with an index score of -10. That missed expectations for -7 and was down from -5 in the previous month. It’s also the lowest reading in 11 months. “Strong consumer spending has propped up the economy since last June but now the twin pressures of higher prices and sluggish wage growth are squeezing household finances and adding to widespread fears of a Brexit-induced economic slowdown,” Joe Staton, head of market dynamics at GfK, said.

FSB blasts Lloyds over HBOS compensation

The Federation of Small Businesses has criticised Lloyds Banking Group for being slow to compensate HBOS victims. Lloyds, which has set aside £100m to pay out in compensation to 64 business victims, has so far only agreed a compensation offer with one party. Mike Cherry, national chairman of the FSB, said: “Ten years is too long to wait for fair treatment. It’s time to give these entrepreneurs the support they’re due”.

Haldane says future rate rises would be “limited and gradual”

The Bank of England’s chief economist Andy Haldane has told BBC Newsnight that British people were feeling “frustrated and squeezed” because their pay has flatlined for a decade. Lack of pay growth is “a factor that has contributed to rates in the UK remaining at their currently very low levels”, he said, adding that pay growth would be an indicator the Bank would look out for when considering rate rises. But he said any change to the record low rates would be “gradual and to a limited extent”. Mr Haldane earlier told BBC Wales that the Bank needed to seriously consider raising rates to dampen cost of living increases.

The Daily Telegraph   BBC News

Consumer debt ticks upwards

Bank of England figures show unsecured net consumer credit rose by £1.7bn during May, the largest increase since November 2016 and above the six month-average of £1.5bn. The figure was also higher than analyst expectations of a £1.4bn increase. Economists said the data suggests consumers are increasingly using debt to combat the squeeze on household budgets brought about by rising inflation and a drop in real wages.

The Times

EU-wide pension scheme planned

The European Commission has proposed a new EU-wide pension scheme that would allow workers to save into one pot regardless of whether they moved jobs between countries. The scheme would be regulated by the European Insurance and Occupational Pensions Authority and it is not yet clear if it would be available to UK savers after Brexit.

The Guardian, Page: 24

Customs timetable tight

KPMG has warned that big businesses will need up to a year to prepare for new customs arrangements to prevent trade with the EU grinding to a halt after Brexit. Bob Jones, head of customs at KPMG, said: “The customs agreement the UK arrives at with the EU defines the requirements, but the systems themselves can take a year to design, build, test and approve. With potentially no transitional period around customs, the timescales are looking tight.” The warning from KPMG comes after Brexit Secretary David Davis said earlier this week that he did not believe any transition arrangements would include customs union membership.

The Times, Page: 45

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Business News 29th June 2017

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