Political turmoil over UK’s draft agreement with the EU creates fresh uncertainty for currency and share traders

(qlmbusinessnews.com via news.sky.com– Thur, 15 Nov 2018) London, Uk – –

A series of resignations over the UK's draft agreement with the EU have created fresh uncertainty for currency and share traders.

The pound has fallen sharply while banking and house building stocks are also under pressure after a draft Brexit deal was hit by political turmoil.

Sterling was more than two cents lower against the dollar at less than $1.28 in the wake of Dominic Raab's resignation as Brexit Secretary while it was also down by two cents versus the euro, at €1.13.

In the stock market, Royal Bank of Scotland and Barclays led the fallers, dropping 7%, while big house builders such as Baratt Developments and Persimmon each slumped by 6%.

But the wider FTSE 100 was less heavily affected, with the pound's fall providing a boost to the sterling value of the top-flight's multinationals, whose earnings are largely in foreign currencies.

However, the index turned negative by mid-morning when Work and Pensions Secretary Esther McVey announced that she would follow Mr Raab in quitting the Cabinet.

The second-tier FTSE 250 Index, which has more of an exposure to the UK economy, was down by around 1%.

Chris Beauchamp, chief market analyst at IG, said: “As the steady drip of resignations hits the government, the UK's deal with the EU appears to be dead in the water already.

“Risk appetite has taken a hit across the board.”

The falls for banking stocks came after state-backed RBS revealed last month that it was putting aside £100m to guard against a “more uncertain economic outlook” ahead of Brexit.

House builders have also revealed their exposure to the uncertainty, with Taylor Wimpey saying earlier this week that there were “signs of customer caution” and that it expects sales volumes will fail to grow next year.

At the same time, house price growth has slowed sharply.

Currency markets have been in volatile mood in recent weeks amid the changing prospects for a Brexit deal.

The pound had crept above $1.30 against the dollar on Wednesday after it emerged that UK and EU officials had agreed a draft deal, with gains only muted given the difficult task of winning political backing for it.

Ratings agency Moody's has described the agreement as a positive step but warned that it was “far from the end of the process” and that its passage through Parliament was far from certain.

Colin Ellis, Moody's chief credit officer for Europe, Middle East and Africa, said: “If the UK parliament does not support the agreement then – in the absence of further developments – the EU and the UK will be heading for a no-deal Brexit by default.

“As we have said previously, that would have significant negative consequences for a range of issuers.”

Experts including the Bank of England expect a sharp shock to the economy if there is a no-deal withdrawal and the UK's independent fiscal watchdog has drawn comparisons with the impact of the three-day week in 1974.

By John-Paul Ford Rojas

 

 

Pound falls as Prime Minister Theresa May struggles to broker an agreement on Brexit

(qlmbusinessnews.com via bbc.co.uk – – Mon, 12th Nov 2018) London, Uk – –

The pound has fallen against the dollar amid political uncertainty as Prime Minister Theresa May struggles to broker an agreement on Brexit with her cabinet.

In early trading, sterling fell nearly 1% against the dollar to $1.2845.

Against the euro, it was down 0.2% at €1.1422.

Analysts said the fall was partly a reaction to the latest news concerning Brexit talks, but also reflected a stronger dollar.

Mrs May is trying to rally support among cabinet ministers for her Brexit proposal in time for a hoped-for summit in Brussels later this month.

However, media reports suggest that her efforts have been delayed by increasing disarray in her cabinet over the issue.

On Friday, Transport Minister Jo Johnson became the latest government figure to quit his post over Brexit, arguing that UK was “on the brink of the greatest crisis” since World War Two.

Simon Derrick, head of currency research at Bank of New York Mellon, said the pound's drop was “obviously related to the uncertainty over the weekend”, but noted that sterling had largely “held its own” against the euro.

He told the BBC: “At least half of it is actually about dollar strength and the expectation that the Federal Reserve will hike interest rates in December.”

Connor Campbell, financial analyst at Spreadex, said: “Sterling's early November rebound continued to unravel on Monday, the currency coming down with a nasty case of the Brexit blues.

“With her most ardent anti-EU MPs opposed to her customs arrangement plans, and a potential Remain rebellion brewing following the resignation of Jo Johnson, Theresa May appears to have been forced to abandon the emergency cabinet meeting that was pencilled in, after a supposed breakthrough last week.”

 

 

Uk retailers shut 2,700 shops in the last six months in toughest trading climate in five years

(qlmbusinessnews.com via bbc.co.uk – – Fri, 9th Nov, 2018) London, Uk – –

About 14 shops are closing every day as UK High Streets face their toughest trading climate in five years, a report has found.

A net 1,123 stores disappeared from Britain's top 500 high streets in the first six months of the year, according to the accountancy firm PwC.

It said fashion and electrical stores had suffered most as customers did more shopping online.

Restaurants and pubs also floundered as fewer people go out to eat or drink.

London was the worst-hit region, PwC said, while Wales had the lowest number of closures.

“Looking ahead, the turmoil facing the sector is unlikely to abate,” said Lisa Hooker, consumer markets leader at PwC.

“Store closures in the second half of the year due to administrations and company voluntary arrangements [a form of insolvency] already announced will further intensify the situation.”

According to PwC, 2,692 shops shut across the UK in the first half of 2018, while only 1,569 new stores opened. The data looks at retail chains with more than five outlets.

Which sectors were hit hardest?
Electrical goods stores were among the biggest casualties, largely due to the collapse of Maplin in February that resulted in 50 stores being closed.

Italian restaurants also struggled, as Jamie's Italian and Prezzo both shut stores after striking rescue deals with their creditors, while Strada also made closures.

PwC said there was net decline of 104 fashion shops and 99 pubs as openings failed to replace closures “at a fast enough rate”.

There were some bright spots, however, with supermarkets, booksellers, ice cream parlours and coffee shops all seeing slim net gains in their store counts.

Which regions suffered most?
According to PwC, Greater London had the largest number of store closures of any UK region, with a fall of 716, while only 448 were opened.

None of the UK regions analysed by PwC recorded a net gain in store count in the first six months of the year.

Newcastle fared worst in the North East, with a net decline of 17 stores, while Nottingham fell by 35.

Other cities that suffered included Leeds, which opened nine stores but closed 35, and Reading where there were 39 closures and only 18 openings.

What's causing the problem?
Retailers are facing a perfect storm of pressures as consumers rein in their spending and do more of their shopping online.

As a result, many retailers have found themselves struggling to pay their rents and other overheads, such as a rising minimum wage and business rates.

In last month's Budget, Chancellor Philip Hammond promised to spend £900m on reducing the business rates bill of 500,000 small retailers by a third.

He also promised a new tax for online firms that employ fewer staff and pay far lower business rates.

However, the British Retail Consortium said the chancellor was “tinkering around the edges” and called for “wholesale reform” of the business rates system.

Jake Berry, the minister responsible for High Streets, said the government was determined to make them thrive.

“We have created a £675m fund to help high streets adapt, slashed business rates … and are creating a task force guided by Sir John Timpson, one of the UK's most experienced retailers, to ensure that High Streets are adapting for rapid change and are fit for the future,” he said.

By Daniel Thomas & Daniele Palumbo

 

 

UK customers to save 1 billion pounds a year in energy price cap from January 1st 2019

(qlmbusinessnews.com via uk.reuters.com — Tue, 6th Nov 2018) London, UK —

LONDON (Reuters) – A British price cap on the most widely used domestic energy tariffs will come into force on Jan. 1, 2019, saving households a total of around 1 billion pounds a year, energy regulator Ofgem said on Tuesday.

The regulator was tasked by parliament with setting a cap after a committee of lawmakers called Britain’s energy market “broken”. Prime Minister Theresa May said the energy tariffs were a “rip-off”.

The cap, set at 1,137 pounds per year for a dual fuel bill – gas and electricity – is in line with an indicative level announced in September.

It will give 11 million customers cheaper prices and save a typical customer on the most expensive tariff up to 120 pounds a year, with the average saving expected to be 76 pounds a year, Ofgem said.

The level of the temporary cap will be updated in April and October each year to reflect the latest costs for suppliers such as wholesale energy prices and policy costs, and is expected to run until 2023.

Britain’s big six energy suppliers are Centrica’s (CNA.L) British Gas, SSE SSE, Iberdrola’s (IBE.MC) Scottish Power, Innogy’s npower (IGY.DE), E.ON (EONGn.DE) and EDF Energy (EDF.PA).

Average fuel bills fell for UK households last year, but the government is still concerned by the large disparity in prices. Ofgem said the fall was due to factors such as lower wholesale energy prices and lower margins for the suppliers.

The difference between the average standard variable price and the cheapest tariff offered by Britain’s big six energy suppliers was 320 pounds between June 2017 and June 2018, an Ofgem report in October showed.

All of the big six suppliers have increased their prices this year, and since a law to cap prices was introduced to parliament in February.

“In the past few months loyal energy customers have continued to be hit by unjustified price rises on their already rip-off tariffs,” Britain’s energy and clean growth minister Claire Perry said in a statement.

“Today’s final cap level brings greater fairness to energy prices,” she said.

Some energy suppliers have warned the price cap could hamper competition in Britain’s energy market, which has around 70 suppliers.

“It is crucial that the cap doesn’t halt this growth of competition and choice and still enables energy companies to both invest and attract investment,” Lawrence Slade, chief executive of industry group Energy UK said in a statement.

Analysts have also warned rising wholesale prices mean Ofgem is expected to raise the cap next April.

By Susanna Twidale

 

 

Uk voluntary living wage rises to £9 benefiting around 180,000 workers

(qlmbusinessnews.com via news.sky.com– Mon, 5th Nov 2018) London, Uk – –

One worker on the minimum wage tells Sky News that a proper living wage would liberate her from a “surviving pay cheque”

The voluntary living wage – designed to give workers enough money to live on – is to be increased.

The new rate has been calculated by the Living Wage Foundation to offset the rising cost of everything from public transport to monthly rent.

The new hourly rate will see the living wage rise by 25p to £9 for workers across the UK – except in London where it will rise by 35p to £10.55.

Both figures are higher than the statutory national living wage, which is due to rise to £8.21 in April for workers aged 25 and over.

More than 4,700 businesses have already signed up, benefiting around 180,000 workers.

Lauren Townsend – a graduate who works as a waitress for a multimillion pound restaurant chain on the minimum wage – would like to be one of them.

“A real living wage would make the difference between a surviving pay cheque and a pay cheque and living,” she told Sky News.

“I'm 27 years old and I live in a house share with four other adults who are all in their 20s,” she said.

“I live with a married couple. We can't afford to save to buy a house. We have no savings put aside for a rainy day. We are putting off having children because we can't afford to have children.”

Director of the Living Wage Foundation, Tess Lanning, wants more businesses to sign up.

“There has been a rise in the number of jobs paying less than the real living wage in the last year,” she said.

“So that's why we need more employers to step up, go beyond the government minimum and pay a real living wage based on what people need to live.”

She added that the living wage can have “real business benefits – improvements in staff turnover, absence rates, (and) a more motivated, loyal, engaged staff”.

David Lesniak, co-owner of bakery and restaurant Outsider Tart in Chiswick, pays his staff the living wage despite facing high running costs – particularly business rates.

He said: “It's exceedingly important that we do our best to do right by our staff because we know they are challenged in many ways, from how they get to work, how they put a roof over their head, and how they put food in their mouths, so wherever we can help out we try to help out.”

The business department said the statutory living wage had “helped to deliver the fastest wage growth for the lowest paid in 20 years”.

It added: “In last week's budget we announced that from April 2019 full-time workers will earn an extra £690 a year.

“The government takes advice on minimum wage rates from the independent Low Pay Commission (LPC), which balances the needs of workers and businesses.

“The LPC aims to set the national minimum wage as high as possible without harming employment prospects.”

By Emma Birchley

 

 

Pound sterling rise on report of a tentative financial services agreement with the EU

(qlmbusinessnews.com via news.sky.com– Thur 1st Nov, 2018) London, Uk – –

Negotiators have reached a tentative agreement on all aspects of a future partnership on services, The Times says.

The pound rose against the dollar after The Times reported Prime Minister Theresa May had struck a tentative deal with the European Union on financial services.

British and European negotiators have reached an agreement on all aspects of a future partnership on services, the paper said.

The deal gives UK financial services companies continued access to European markets after Britain leaves the EU, as long as British financial regulations remain broadly aligned with Brussels.

The pound, which has lost 3.6% versus the dollar over the last three weeks amid concerns of a disorderly Brexit, jumped 0.62% to $1.2843.

With Britain leaving the EU in March, many international banks based in the UK have shifted operations and jobs to the continent so that they can continue to service clients.

In a sign that a wider deal was close to being concluded, Brexit Secretary Dominic Raab has revealed he expects to have a Brexit divorce deal confirmed with Brussels by 21 November.

The Brexit secretary announced the date in a letter to senior MPs who had summoned him to appear before a committee.

A government source confirmed to Sky News they were hoping for a political agreement by 21 November, with all EU leaders meeting in mid-December to sign it off.

 

 

Uk factories suffered their worst month since Brexit vote – PMI

(qlmbusinessnews.com via uk.reuters.com — Thur 1st Nov, 2018) London, UK —

LONDON (Reuters) – British factories suffered their worst month since just after 2016’s Brexit vote in October, due to concerns about the country’s approaching departure from the European Union and increased global trade tensions, a survey showed.

In the clearest sign to date that Britain’s economy is slowing after a strong summer, the IHS Markit/CIPS Manufacturing Purchasing Managers’ Index (PMI) fell sharply to 51.1, its lowest since July 2016, from a downwardly revised 53.6 in September.

The reading was weaker than all the forecasts in a Reuters poll of economists.

New order books and employment contracted for the first time since July 2016.

“October saw a worrying turnaround in the performance of the UK manufacturing sector,” IHS Markit director Rob Dobson said.

“At current levels, the survey indicates that factory output could contract in the fourth quarter, dropping by 0.2 percent.”

Foreign demand fell for the second time in three months with some companies saying Brexit uncertainties cost them work from within the EU.

Many manufacturers are worried about the risk of border delays which would affect their just-in-time processes.

Prime Minister Theresa May faces opposition to her Brexit plan from within her own Conservative Party while also so far failing to find common ground with other EU leaders, raising fears that Britain could leave the EU without a transition deal.

Other firms pointed to rising world trade tensions and weaker demand in the global automotive industry.

Manufacturing accounts for about 10 percent of Britain’s economic output.

So far, the world’s fifth-biggest economy has proven more resilient to the decision to leave the EU than many forecasters predicted at the time of the Brexit vote.

Strong spending by consumers over the summer caused growth to accelerate in the three months to August.

But there have been signs that the approach of Brexit in less than five months’ time – with no agreement yet in place to smooth Britain’s exit from the bloc – is weighing on companies.

Official figures show that manufacturing failed to contribute to economic growth in the first half of 2018.

The Bank of England, which is due to announce its monetary policy decision for November at 1200 GMT, is widely expected to keep interest rates on hold until it has more clarity on what Brexit will mean for Britain’s economy.

Thursday’s PMI showed input prices for British factories grew at their slowest pace in 28 months but still remained high due to rising prices for commodities and the Brexit hit to the value of sterling.

By William Schomberg

 

 

FCA probe Car and house insurance policies

(qlmbusinessnews.com via bbc.co.uk – – Wed, 31st Oct 2018) London, Uk – –

The City regulator is to investigate how home and car insurance policies are priced after finding “hidden” discrimination between customers.

The Financial Conduct Authority (FCA) will study the scale of the issue, whom it affects, and possible solutions.

Insurance customers may pay different prices depending on how loyal they are, their age, and whether they are online.

Marital status, home postcode and employment status may also have a hidden effect on price, the FCA said.

Citizens Advice has already warned loyal customers are being “ripped off”.

It launched a super-complaint claiming that customers who stick with the same supplier for a variety of household services are losing a total of £4.1bn a year. That amounts to an average of £877 per person.

Failing to shop around, or the inability to do so, costs people hundreds of pounds.

This is known in the industry as “price walking” – where the cost of insurance is increased each year the customer sticks with the same provider, eventually making their policy much more expensive (and profitable for the insurer) than for a new customer.

Part of the response to the Citizens Advice complaint is this review into the general insurance market by the FCA.

The FCA said UK insurers generated £78bn in premiums from customers and that 82% of adults had one or more general insurance products.

In an analysis of the home insurance market, the FCA said there was evidence of significant price competition for new customers with new policies offered at 30% below the cost of providing the policy and firms increased premiums in the second and third years of the policy.

The regulator has now written to the chief executives of insurance firms to set out that it expects them to treat customers fairly.

Andrew Bailey, chief executive of the FCA, said: “This market study will help us examine the outcomes from general insurance pricing practices and inform how, if necessary, we should intervene to improve the market.

“If change is needed to make the market work well for consumers, we will consider all possible remedies to achieve this.”

The FCA said it had already found some firms were not complying with its rules about information that customers should receive when they renew their policies and could use its regulatory powers against those with whom it had concerns.

These rules include making it clear in a renewal letter how much people paid the previous year.

In November last year, the BBC revealed how some insurers were burying these pricing details deep in renewal documents.

In the letter to the heads of insurance firms, Mr Bailey said: “There is a significant risk of consumer harm if your firm has not implemented an appropriate pricing strategy with effective governance and controls to determine and monitor your pricing activities and evaluate how your pricing decisions will affect consumer outcomes.”

Industry response
In May, insurers said they would crack down on “excessive” differences in premiums for new customers and existing policyholders.

The Association of British Insurers (ABI) and the British Insurance Brokers' Association (BIBA) said their Guiding Principles and Action Points should mean “an improvement in the outcomes for long-standing customers”.

However, the FCA investigation seems to challenge whether this response was sufficient.

Hugh Savill, the ABI's director of regulation, said: “While many customers benefit from competitive motor and home insurance markets with lower premiums, we agree that the market is not working as well as it should for some long-standing customers.

“This is an important issue and insurers will work with the FCA to address issues raised in the report to ensure that the market works as well as possible for all consumers.”

 

 

Tech giants Google and Facebook hit with digital services tax worth up to £400m per year

Source: pixabay

(qlmbusinessnews.com via telegraph.co.uk – – Tue, 30th Oct 2018) London, Uk – –

Online tech giants including Google and Facebook are to be hit with a digital services tax worth up to £400m per year, as Chancellor Philip Hammond used the Budget to take the lead in a global push to tax Silicon Valley while limiting the pain felt on Britain's struggling high streets.

But the proposal for what he termed a “narrowly targeted” tax, to be paid only by large companies that are profitable and generate over £500m a year in global revenues, was sharply criticised by some as potentially damaging for the UK's technology industry at a sensitive time as negotiations continue over Brexit.

Some warned that the move, first reported earlier this month by the Sunday Telegraph, could damage the UK's reputation as a stable place to invest.

Russ Shaw, founder of Tech London Advocates, said a unilateral UK tax was the “wrong approach”. He said: “Digital tax is a universal problem, and must be taken on in that manner. Any other approach makes Britain economically vulnerable”.

Meanwhile, writing on Twitter, Peter Kyle MP pointed out that Sainsbury alone pays £580m in business rates. He branded the proposed tax, geared to level the playing field with the high street, as “pathetically tokenistic”.

But Chancellor Philip Hammond said the tax, which is expected to affect about 30 companies, was all about “fairness”.

He said: “It's clearly not sustainable, or fair, that digital platform businesses can generate substantial value in the UK without paying tax here in respect of that business.”

He said the tax would be aimed at UK-generated revenues of specific digital platform business models “designed to ensure it is the established tech giants rather than the technology startups which shoulder the burden”.

The announcement confirmed that the levy would not be an online-sales tax on goods ordered over the internet as “such a tax would fall on consumers of those goods – and that is not our intention”. It instead focuses largely on advertising revenues.

According to a consultation document released after Mr Hammond appeared in the House of Commons, the 2pc tax will be applied to the revenues a social media platform generates from revenue targeting adverts at UK users, the revenues a marketplace generates from facilitating a transition between UK users and the revenues a search engine generates from displaying advertising.

It will be rolled out in April 2020, although Mr Hammond said the UK would continue to work with international bodies, the OECD and G20, to attempt to strike an international deal on how to tax tech companies and would not go ahead with its own tax if such an agreement could be reached.

“I’m already looking forward to my call from the former leader of the Liberal Democrats,” joked Mr Hammond in reference to former deputy prime minister Nick Clegg, who is to join Facebook as its new global affairs and communications chief. Facebook is expected to be among the hardest hit by the planned tax.

The announcement came despite lobbying efforts by companies including Facebook to stave off such measures, amid mounting criticism over the amount of tax tech giants are paying in the UK compared to the profit they are generating in the region.

eMarketer estimates that Facebook generated nearly £2.3bn in digital advertising revenue for 2017, and Google £4.7bn, but the two paid just £15.7m and £50m in UK tax respectively.

If the Treasury is to take £400m every year from the tax, Deloitte's Zubin Patel said it would need to apply “more widely than just the biggest and most famous companies”.

Another tech industry source said the latest measures were a “bit half hearted” and “not the bold decisive moves” which had been expected.

The enormous complexity of crafting an effective tax was also becoming clear.

Based on the Government's estimates, the maximum Google or Facebook would likely pay under the new tax would be £200m, and the amount is expected to be much less, with the OBR suggesting just £30m could be raised from each of the companies. The OBR admitted that its estimates were “subject to high uncertainty due to the data, modelling and behavioural complexities involved”.

The OBR suggested the £400m could be widely optimistic as well, suggesting that the government could lose around 30pc of that revenue by 2024 due to companies redistributing their revenue.

The announcement was met with a mixed response on Monday, as some hailed the move as a key to ensuring the giants pay their fair share, while others warned it would damage the tech sector in the long run.

TechUK chief executive Julian David said the approach risked “undermining the UK’s reputation as the best place to start a tech business or to invest at a time when the UK needed to enhance its attracrtiveness.

However, Adam Rose, a partner at Mischon de Reya, said the tax was “possibly the first step towards bringing the UK's tax system for technology dominated services into the modern era”.

Vince Cable, the Liberal Democrat leader, added that the tax could help level the playing field, saying “tech giants have got away without paying their fair share for too long”.

By Hannah Boland and Matthew Field

 

 

Chancellor Philip Hammond prepares last Budget before Brexit

(qlmbusinessnews.com via bbc.co.uk – – Mon, 29th Mon 2018) London, Uk – –

Philip Hammond is preparing to present the last Budget before Brexit.

The chancellor is expected to announce a rise in spending on mental health in England and has also hinted at cash for universal credit welfare reforms.

He has admitted a change of approach, including an entirely new economic plan, will be needed if the UK and the EU cannot agree a deal by 29 March.

Labour is calling for more investment in public services to put an end to years of “failed austerity”.

Earlier this month Prime Minister Theresa May promised an end to the cuts made to public spending since 2010 – and Mr Hammond will be under pressure to spell out how that will work.

 

Philip Hammond is preparing to present the last Budget before Brexit.

The chancellor is expected to announce a rise in spending on mental health in England and has also hinted at cash for universal credit welfare reforms.

He has admitted a change of approach, including an entirely new economic plan, will be needed if the UK and the EU cannot agree a deal by 29 March.

Labour is calling for more investment in public services to put an end to years of “failed austerity”.

Earlier this month Prime Minister Theresa May promised an end to the cuts made to public spending since 2010 – and Mr Hammond will be under pressure to spell out how that will work.

The chancellor's motivation for holding the Budget in October was to get it out of the way, before the last moments of the Brexit process create a Parliamentary rollercoaster.

It was – in a period of political peril for the government – meant to be non-controversial, “slimline”, almost a “holding Budget”, according to senior government figures.

So far, so non-controversial. Except at the Tory conference the prime minister decided to charge the politics around the Budget by suggesting that the era of the squeeze on public spending was at an end.

Economic editor Kamal Ahmed

The chancellor has a number of competing challenges.

Some of them are economic – can he really “end austerity” by spending more and at the same time keep his promise to control the government's £1.8tn debts?

Some of them are political – don't forget the government does not have a majority and pushing any big tax rises, for example, through Parliament would be very difficult. Mr Hammond is also being lent on to be “more positive” on the economy by his next door neighbour at Number 10, Theresa May.

If the UK gets a good deal from the EU, he said, “we will be able to show the British people that the fruits of their hard work are now at last in sight”.

The two sides have not yet reached agreement, and both the UK and the EU are making contingency plans for what happens if there is no deal.

Mr Hammond told Sky News that in this scenario: “We would need to look at a different strategy and frankly we'd need to have a new Budget that set out a different strategy for the future.”

He said the government had a “fiscal buffer” to provide protection for the economy if needed.

Monday's Budget will be based on the assumption of an “average-type free trade deal” being agreed between the two sides, he added.

Follow the Budget on the BBC

The chancellor has been under growing pressure – including from some Tory MPs – to provide more money to protect people losing out from the switch to universal credit, which merges six working-age benefits.

Asked about this, Mr Hammond told the BBC “judge me by my record” – saying he had committed extra money to the scheme in each of his previous two major financial statements.

“When we see things that need addressing, we address them,” he said.

Labour said the entire Budget should be voted down unless the government agrees to halt the roll-out of universal credit.

“The callous complacency of the chancellor who has refused to make good on the Tories' promise to end austerity is shocking,” added shadow chancellor John McDonnell.

“Nothing less than an end to failed austerity in tomorrow's budget will be acceptable.”

The £2bn mental health pledge is included in a £20bn boost to the NHS announced by the government in June. The current annual mental health spend is about £12bn.

The new funds will go towards ensuring round-the-clock mental health support in major A&E centres and providing more mental health ambulances.

People calling the non-urgent 111 number will be directed to the right support thanks to the investment, the government promised.

Health Secretary Matt Hancock acknowledged there would be no overnight transformation, telling BBC Radio 4's Today that putting mental health services on the same financial footing as physical services was the “work of a generation”.

But he promised the extra resources would come “irrespective” of what happened with Brexit.

Labour responded: “If this announcement is simply money that's already been promised, it will do little to relieve the severe pressures on mental health services that have built up because of this Tory government's relentless underfunding of the NHS.”

 

 

Amsterdam the Bicycle Paradise of the Netherlands – How Other Cities Can learn from it

 

Source: Bloomberg

The Dutch capital Amsterdam is widely known for being bike-friendly. But it wasn’t always a model cycling city. Public outrage at rising traffic casualties in the Seventies caused city planners to rethink their approach to urban design.

 

Amazon announce plans to create 1,000 more technology jobs in the UK

Flickr/simone.brunozzi

(qlmbusinessnews.com via theguardian.com – – Fri, 19th Oct 2018) London, Uk – –

Online retailer to expand R&D operations in the city as well as in Edinburgh and Cambridge

Amazon has said the UK will be “taking a leading role in global innovation” as it announced plans to hire 1,000 more technology, research and other skilled workers by next year.

The US online retailer is to open its first office in Manchester, with room for 600 new jobs in the Hanover Building in the city’s Northern Quarter – once the headquarters of the Co-operative Group.

Doug Gurr, the UK manager for Amazon, said the UK was “taking a leading role in our global innovation”.

“These are Silicon Valley jobs in Britain, and further cement our long-term commitment to the UK,” he said.

Amazon said the new Manchester team would work on research and development, including software development and machine learning.

Gurr said: “Manchester was at the heart of the industrial revolution and has a fantastic history of innovation. The city offers an incredibly talented workforce and a budding tech scene with some of the most exciting, fast-growing tech companies in the UK situated here.”

Andy Burnham, the mayor of Greater Manchester, said: “Amazon opening their new office in Manchester is another vote of confidence in our city-region as a global digital leader.”

In the latest phase of Amazon’s UK expansion, the firm said it was also creating space for 250 more high-skilled roles in Edinburgh, where it is taking three floors of the Waverley Gate building.

The company is also expanding its offices in Cambridge, where technicians work on the group’s Alexa digital personal assistant system, drone development and other Amazon devices. Amazon is making room for 180 new roles in Cambridge.

Amazon’s rapid global growth has spurred it to hire thousands of workers in Britain in recent years, most of whom are based at its warehouses.

The company this month responded to criticism of poor pay and conditions for its warehouse workers with the announcement of a pay rise to £10.50 an hour in London and £9.50 across the rest of the country.

However, it later emerged that the company had slashed share bonuses for those workers, offsetting at least half of the pay rise.

By Sarah Butler

 

 

Chancellor Philip Hammond needs at least £19bn to ‘end austerity’ – IFS

(qlmbusinessnews.com via news.sky.com– Tue, 16th Oct 2018) London, Uk – –

The only way the chancellor can end austerity is to borrow substantial sums or raise Britain's tax burden to the highest level for nearly 70 years, the Institute for Fiscal Studies (IFS) has warned.

In its closely-watched green budget, a survey of the UK economy and public finances, the IFS said that even the mildest version of “ending austerity” would cost a minimum of £19bn – the equivalent of a penny on income tax, National Insurance and on VAT.

The IFS added that there was effectively no prospect of a “Brexit dividend” for the public finances and warned that UK economic growth would remain weak for another two years.

Its report comes a fortnight ahead of the chancellor's winter budget, in which he will unveil his latest plans for borrowing and spending.

But the IFS said that Philip Hammond can only end austerity – in other words cancel major planned spending cuts – through significant tax rises or by borrowing so much that he breaks his commitment to eliminate the deficit by the middle of next decade.

It added that the sum – which it put at a provisional £19bn – would be bigger still if Mr Hammond abolished the benefits freeze and increased the generosity of other payouts.

Paul Johnson, director of the IFS, said that these decisions, which will form key parts of the budget, will “probably be the biggest non-Brexit related decision this chancellor will make”.

“He has a big choice,” he added. “He could end austerity, as the prime minister has suggested.

“But even on a limited definition of what that might mean would imply spending £19bn a year more than currently planned by the end of the parliament. An increase of that size is highly unlikely to be compatible with his desire to get the deficit down towards zero.

“Alternatively, the chancellor could stick to his guns on the deficit and leave many public services to struggle under the strain of a decade and more of cuts.

“He could reconcile these demands by raising taxes, and in principle there are plenty of good options, but the overall tax burden is already high by UK historical standards and he could be constrained by the lack of a parliamentary majority. This is going to be the toughest of circles to square.”

An increase in the tax burden of that scale would lift it to the highest level since the late 1940s and early 1950s – though it would still leave it in the middle of the pack of other developed economies.

But Mr Johnson said that it was far more likely that the government would simply borrow more. “Increasing borrowing is clearly the line of least resistance,” he said. “If I had to guess I would guess borrowing will be higher than the number in the spring statement.”

The IFS said that the extra money was significantly higher because of the extra commitments the chancellor had already made to spend more on the NHS and on international aid.

And it calculated that even if the UK enjoys an economic bump if it seals a deal to leave the European Union, the scale of the so-called “Brexit dividend” – the money the Treasury might save on contributions to the EU – might only be around £1bn a year by 2022/23 – a rounding error in fiscal terms.

John McDonnell, Labour's shadow chancellor, said: “This heaps yet more pressure on the chancellor to explain how he is going to deliver on the Tory promise of ending austerity.

“With billions of cuts in the form of Universal Credit still to come, and public services at breaking point, tinkering around the edges is not enough. It's time the chancellor finally came clean about where the additional funding for the NHS is coming from.”

A Treasury spokesperson said: “Our balanced approach is getting debt falling and supporting our vital public services, while keeping taxes as low as possible. This year, we have already committed an extra £20.5bn a year to the NHS, scrapped the public sector pay cap, and frozen fuel duty for the ninth year in a row.”

By Ed Conway

 

Housing market unaccessible to 40% of Young adults – IFS

(qlmbusinessnews.com via news.sky.com– Mon, 8th Oct 2018) London, Uk – –

The IFS says average house prices have surged 173% over the past 20 years, when a cheap home was in reach for 90% of young adults.

About 40% of young adults would not be able to buy one of the cheapest homes in their area – even if they managed to save a 10% deposit, research suggests.

Back in 1996, a property would have been in reach for 90% of 25 to 34-year-olds as long as they had a 10% deposit and borrowed four-and-a-half times their salary.

Fast forward to 2016, just 60% in this age range can do the same – leaving many thousands locked out of the market.

Researchers from the Institute for Fiscal Studies found the situation is worse for aspiring homeowners in London, where just one in three young adults could borrow enough to buy one of the cheapest homes in their area with a 10% deposit.

Average house prices in England have surged by 173% over the past two decades, compared with a meagre 19% rise in the real incomes of young adults over the same period, the report claimed.

In 2016, about 50% of young adults would have needed to save more than six months of their post-tax income to raise a 10% deposit for a cheap home in their area. The IFS estimates just 10% would have had to do the same 20 years ago.

Polly Simpson, a research economist at the IFS who co-authored the report, said: “Big increases in house prices compared to incomes over the last two decades mean that it is increasingly difficult for young adults to get on the housing ladder, even if they do manage to save a 10% deposit.

“Many young adults cannot borrow enough to buy a cheap home in their area, let alone an average-priced one. These trends have increased inequality between older and younger generations, and within the younger generation too.”

The IFS says that easing planning restrictions would help to increase levels of home ownership while reducing property prices and rents – giving relief to some Britons who will never own a property.

Its senior research economist Jonathan Cribb said: “The most economically productive and wealthiest parts of England – London and the South East – are those with the most restrictive planning constraints.

“It is unsurprising that these areas have also experienced the biggest house price increases. Increasing the responsiveness of construction to house prices is a necessary part of the solution, particularly in these areas.”

A spokesperson for the Ministry of Housing, Communities and Local Government, responded: “This government is committed to helping more people get on the housing ladder and last year saw the highest number of first time buyers for over a decade.

“Through our Help to Buy scheme and the cut in stamp duty for first time buyers we are helping restore the dream of home ownership for a new generation.

“Over 1.1 million properties have been built since 2010 and our targeted investment and planning reform will deliver more of the homes communities need.”

 

 

Ofgem orders improvement of complaints handling by energy firms

Pexels Image

(qlmbusinessnews.com via bbc.co.uk – – Thur, 27th Sept 2018) London, Uk – –

Energy regulator Ofgem has ordered 11 of the UK's biggest suppliers to improve how they deal with complaints.

The regulator said it had “compliance cases” open against four companies over customer dissatisfaction with how they handled complaints.

It has also asked another seven to improve their procedures.

However, the chief executive of industry body Energy UK said suppliers' overall performance in dealing with consumers' problems was improving.

Lawrence Slade pointed to Ofgem's own figures which showed that the number of complaints received by suppliers had nearly halved since 2014.

However, when the regulator last carried out its complaint handling survey in 2016 only two firms were singled out for their performance.

Following its latest survey, Ofgem has opened compliance cases into First Utility, Ovo Energy and Utilita over their poor handling of customers' grievances.

It has also expanded a customer service compliance case against ScottishPower to include how they handled complaints.

‘Unacceptably low'
During the compliance process Ofgem works with the energy suppliers to achieve improvements. If that does not work the regulator could then open an enforcement case, which could result in the supplier having to pay a fine.

Ofgem has also required all the other domestic suppliers included in its survey – British Gas, Npower, Utility Warehouse, SSE, EDF Energy, E.On and Co-operative Energy – to come up with plans to improve how they deal with complaints.

Dermot Nolan, chief executive of Ofgem, said: “Although the level of satisfaction about complaint handling has increased over the past two years, it is still unacceptably low.

“Some suppliers need to be doing considerably more to get the basics right and provide a service their customers deserve.”

Ofgem's customer complaints survey is carried out every two years. This year it found that of more than 3,000 domestic customers who had complained about their energy companies, 32% were satisfied with how their complaint was dealt with, up from 27% in 2016.

But 57% of respondents said they were dissatisfied.

The main causes of their dissatisfaction were the time taken to resolve the issue, not being kept up to date on the progress of the complaint, and suppliers not giving complainants a clear idea of how long the issue will take to be resolved.

Energy UK's Lawrence Slade said his organisation was working with the industry and Ofgem to see if the rules governing the complaints handling process could be improved.

“Also, given that the majority of complaints arise from billing issues, the continuing roll-out of smart meters, which ensure accurate and up-to-date bills, will help reduce this number further still,” he added.

 

US trade war with China intensifies new imposed $200bn tariffs on imports

(qlmbusinessnews.com via news.sky.com– Tue, 18th Sept 2018) London, Uk – –

Donald Trump says further tariffs worth $267bn (£203bn) will be placed on Chinese imports if Beijing takes “retaliatory action”.

Donald Trump has intensified America's trade war with China by imposing new $200bn (£152bn) tariffs on imports.

The higher import taxes will start from Monday at 10% before rising to 25% on 1 January, the White House announced.

The US president said there would be further tariffs on $267bn (£203bn) in Chinese imports if Beijing takes “retaliatory action against our farmers or other industries”.

“Once again, I urge China's leaders to take swift action to end their country's unfair trade practices,” Mr Trump said.

“Hopefully, this trade situation will be resolved, in the end, by myself and President Xi of China, for whom I have great respect and affection.”

Mr Trump has threatened to target all $500bn (£380bn) of Chinese imports unless Beijing agrees to sweeping changes to its intellectual property practices and what his administration alleges are unfair trade practices.

China denies the allegations and has vowed to hit back with tariffs on $60bn (£45bn) in American goods.

The new tariffs reportedly apply to more than 5,000 items including handbags, rice and textiles.

In a victory for Apple and its US customers, smart watches and some other consumer electronics products were removed from the latest list.

In a statement, Mr Trump insisted China's trade practices “plainly constitute a grave threat to the long-term health and prosperity of the United States economy”.

The US had already imposed 25% tariffs on $50bn (£38bn) in Chinese imports.

Mr Trump said: “For months, we have urged China to change these unfair practices, and give fair and reciprocal treatment to American companies.

“We have been very clear about the type of changes that need to be made, and we have given China every opportunity to treat us more fairly. But, so far, China has been unwilling to change its practices.”

Mr Trump has previously complained about America's massive trade deficit – $336bn (£255bn) last year – with China, its biggest trading partner.

 

 

IMF: No-deal Brexit would entail substantial costs for UK economy

(qlmbusinessnews.com via bbc.co.uk – – Mon, 17th Sept, 2018) London, Uk – –

The International Monetary Fund has warned that a “no-deal” Brexit on World Trade Organization terms would entail substantial costs for the UK economy.

Such an outcome would affect “to a lesser extent” other EU economies.

It said challenges in getting a deal done were “daunting” and warned against further UK interest rate rises.

The IMF said it expected Britain's economy would grow by about 1.5% a year in 2018 and 2019 if a broad Brexit agreement was struck.

Christine Lagarde, the IMF's managing director, added: “Those projections assume a timely deal with the EU on a broad free trade agreement and a relatively orderly Brexit process after that.”

The IMF said that all likely Brexit scenarios would “entail costs for the UK economy”, but that a disorderly departure could lead to “a significantly worse outcome”.

Speaking at a news conference at the Treasury in London, Ms Lagarde said: “Any deal will not be as good as the smooth process under which goods, services, people and capital move around between the EU and the UK without impediments and obstacles.”

She said a “disorderly” or “crash” exit from the EU would have a series of consequences, including reduced growth, an increased deficit and depreciation of sterling, leading to a reduction in the size of the UK economy.

She pointed out that countries tended to trade mostly with their neighbours, adding: “I think geography talks very loudly.”

In July, the IMF said the UK economy would grow by 1.4% this year and 1.5% in 2019.

 

Chanel luxury goods maker chooses London for global office

Wikimedia/Pear285

(qlmbusinessnews.com via bbc.co.uk – – Fri, 14th Sept 2018) London, Uk – –

The luxury goods maker Chanel has told the BBC it's elected to set up its global office in the UK.

For the first time in its 110-year history, the brand is gathering the majority of its global business functions under one roof.

Chanel, renowned for its tweed suits, handbags and perfume, had global sales of over £7bn last year, and employs more than 20,000 people.

It has over 30 million social media followers on Instagram.

Chanel told BBC Radio 4's Today programme that it “wanted to simplify the structure of the business and London is the most appropriate place to do that for an international company. London is the most central location for our markets, uses the English language and has strong corporate governance standards with its regulatory and legal requirements”.

The decision – which is understood to involve dozens of jobs – means that Chanel has picked London as the base for its global team over other locations such as New York, or even its creative hub of Paris.

Chanel, whose Little Black Dress has come to epitomise the label's Parisian heritage, is retaining its head designer Karl Lagerfeld and his team in the French capital.

Burberry stops burning unsold goods
Chanel lifts the veil on its profits
Justine Picardie, editor-in-chief of Harpers' Bazaar and Coco Chanel's biographer, hailed the move as a mark of the global powerhouse's confidence in the UK's long-term prospects.

She pointed out that it also moves Chanel closer to one of its fastest growing customer bases with “spending on luxury goods by affluent London households being only second to Hong Kong, in terms of growth”.

She added: “Chanel leads the way. My strong intuition is that other (luxury brands) will follow.”

The reasons Chanel gives for its decision echoes those cited by the likes of banks and manufacturers who've opted to move operations to the UK over the years.

The news comes as many businesses voice concerns about the continued uncertainty over Brexit and future trading arrangements, and the impact that may have on investment and jobs.

Chanel's decision will be welcome news to British designers as London Fashion Week gets underway. They're potentially facing upheaval to their supply chains in the form of tariffs, delays at the border and exchange rate volatility in the event of a no-deal Brexit.

Such concerns could, according to Paul Alger, of the Fabrics and Textiles Association, make buyers at catwalk shows hesitate to place orders, which would be due for delivery next spring.

The fashion industry contributed over £32bn to the UK industry in 2017, according to the British Fashion Council. That's an increase of 5.4% on 2016, making it one of the fastest growing sectors of the economy.

By Dharshini David

 

UK economy grew by 0.3% in July helped by World Cup and warm weather

(qlmbusinessnews.com via bbc.co.uk – – Mon, 10th Sept 2018) London, Uk – –

The UK economy grew by 0.3% in July after being helped by the heatwave and the World Cup, according to the Office for National Statistics.

In the three months to July, the economy expanded by 0.6%.

“Services grew particularly strongly, with retail sales performing well, boosted by warm weather and the World Cup,” said Rob Kent-Smith from the ONS.

“The construction sector also bounced back after a weak start to the year,” he added, but production contracted.

“The dominant service sector again led economic growth in the month of July with engineers, accountants and lawyers all enjoying a busy period, backed up by growth in construction, which hit another record high level,” said Mr Kent-Smith.

The 0.6% growth rate for the three months to July was at the top end of forecasts, and marks a pick-up from the 0.4% rate seen in the three months to June.