East Sister Rock Island is one of the last homes legally built on coral reef in the Keys and it's on the market for $10 million.
Nestle's new chocolate-making process will reduce sugar content by up to 40 percent.
Qlm referencing: (qlmbusinessnews.com via telegraph.co.uk – – Fri, 2 Dec, 2016) London, Uk – –
From pooling resources to using a hive mind: co-workspaces can prove fruitful for enterprises.
If running a small business sometimes feels like a lonely pursuit, shared working spaces could be for you. From networking opportunities to joining forces with university research teams, there are many advantages to communal working.
Kelly Molson found the Cambridge Business Lounge to be invaluable when she first moved to the city and set up her design agency, Rubber Cheese.
Following a Facebook advertisement, she found a mix of professionals from a variety of industries, the opportunity to run and take part in workshops, and spaces for networking, meetings and quiet time. It was affordable and had good biscuits.
Ms Molson says: “The owners are incredibly supportive and made a big effort to get to know me and why I was using the centre. Every time I worked there, they were able to introduce me to new people that they thought I’d get on well with, and potentially could work with too.”
Make the most of networking opportunities
“One introduction led to co-founding a networking group, Grub Club Cambridge, which has been incredible. I’ve met amazing people, gained new clients, raised my profile in the city, been a judge for the Cambridge Food & Drink awards, been interviewed on BBC radio and made fab new friends,” she recalls.
Ms Molson advises asking questions of co-workers and taking an interest in their activities. “I’ve met new suppliers, friends and new clients sitting right next to me, along with a valuable support network.”
Barnaby Lashbrooke, founder of virtual assistant platform, Time etc, is a big believer. When his company evolved to a model more reliant on remote workers, he offered his unused office space free of charge to start-ups and entrepreneurs in Birmingham.
Mr Lashbrooke says: “It's nice to be in a position where we can give something back. I'd have loved someone to offer me a free co-working space when I was 18 and running my first business from my very cramped bedroom at home, as it does get lonely at times.”
He’s in no doubt that working alongside new people can be highly motivating. “Entrepreneurs tend to be inspiring, go-getting types that are good to have around.
Think about collaboration, not just your own needs
“You can get so much out of shared office space if you view it as a community of people rather than simply a service available to your business. The knowledge and ideas stored in that community can be the difference between your start-up succeeding or not,” he says.
Some communal working spaces are open to all, while others are tailored towards specific needs. Hubble, an online marketplace for finding and renting office space in London, offers sector-specific shared working spaces.
Varun Bhanot, head of business development, explains: “The hope is that these companies help each other, and benefit from the perks of the environment such as access to industry resources, workshops and talks by thought leaders in their industry.”
He has advice for making the most of your working arrangement. “Shared spaces are designed to engineer fruitful networking and ‘collisions’. Take advantage of those around you, as the chances are they are working on a similar problem to yours, or your company might be a solution they are looking for.
“Spend time in breakout and communal areas. Go to events in the space, or host your own. The best thing about shared space is that there is already a captive audience which is likely to want to listen to your pitch or useful advice.
He also suggests approaching companies about pooling resources. This can go far beyond comestibles such as the milk and coffee, there can be an opportunity to share printing, whiteboards, TVs and meeting room space. It could work out most cost-effective for all the companies to pitch in.
Give yourself room to grow
Mr Bhanot’s key factors in choosing your perfect working space include scalability: is more space available when your company grows? Are there enough meeting rooms so you can book time whenever you need it? Also look for local amenities, such as coffee shops and bars which are great for out-of-the-office meetings with colleagues and clients. And don’t forget the perks, such as weekly fruit drops and pet-friendly areas.
Universities can provide a wealth of resources to SMEs. Lancaster University has business hubs dedicated to technology, the environment and chemistry. Among its £35m investment is the new Collaborative Technology Access Programme, which gives businesses access to a suite of cutting-edge instrumentation and facilities worth almost £7m.
Companies can relocate their entire company, or just their research and development staff, onto campus, or take a hot desk or lab space as and when required.
Dr Mark Rushforth, head of business partnerships and enterprise at Lancaster University’s Faculty of Science and Technology, says: “Renting offices and integrating all or part of a business onto the campus enables faster business growth by providing easier access to our research, knowledge, events, training and facilities. Company staff, academics and research groups are able to interact on a day-to-day basis, co-design new opportunities and have direct access to knowledge exchange staff.”
Each business is allocated a relationship manager, who acts as a link between businesses and academics, facilitating joint research projects and ventures. Companies can also benefit from student placements, access to international markets through a collaborative working scheme, and access to other campus facilities such as libraries and sports centres.
Dr Rushforth adds: “Ask questions, share ideas, get involved, test new employees through student placements, tap into everything you can. There’s a lot of support out there.”
By Tim Aldred
(qlmbusinessnews.com via bloomberg.com – – Thu, 1 Dec, 2016) London, Uk – –
Rolls-Royce Holdings Plc will cut 800 more posts at its marine-equipment and ship-design unit, or about 17 percent of the remaining workforce, as the lower price of crude hurts demand for oil-industry exploration and service vessels.
Restructuring steps will include a further simplification of the unit’s structure, including a “streamlining” of senior management, plus unspecified cost-reduction initiatives, London-based Rolls-Royce said Thursday.
The measures will cost about 20 million pounds ($25 million), split between this year and next, and should deliver annualized savings of up to 50 million pounds from mid-2017, according to a statement.
Rolls, best known for its aircraft engines, has already cut more than 1,000 jobs at its marine operation since 2016, with the division currently employing 4,800 people across 34 countries, including 1,900 in Norway, where it is based.
The offshore market is showing no sign of recovery, with the outlook bleaker as the backlog shrinks, Chief Executive Officer Warren East said Nov. 16. The marine arm has already shut or sold 12 of its 27 sites, and is looking at cutting more locations and shifting some production to emerging economies.
Rolls-Royce’s aviation business has also been hit by a slump in sales of business and regional jets, lower utilization of older wide-body planes and a slowdown in A330 engine deliveries as Airbus Group SE switches to an upgraded model. East has said the company is on course to deliver savings close to 200 million pounds by the end of 2017.
The marine division currently supplies gear including propellers, rudders and propulsion equipment for offshore vessels, oil and gas platforms, freighters, cruise liners, ferries, trawlers, luxury yachts and naval craft, as well as designing entire ships. While the unit markets engines, they’re made by the power systems arm, which has also laid off staff.
As part of the changes Rolls plans to establish a services hub and research center for new propulsion products in Ulsteinvik, Norway.
By Christopher Jasper
In the lead up to the US election, Donald Trump insisted that he could run both the Presidency and his business perfectly. Not any more. The President-elect took to Twitter to announce a change of heart.
(qlmbusinessnews.com via telegraph.co.uk – – Wed, 30 Nov, 2016) London, Uk – –
The European Union desperately needs finance from Britain and will face severe knocks to its economy if member nations do not agree to a transitional period to give banks and finance firms time to adapt to Brexit, Mark Carney has warned.
The Governor of the Bank of England wants a smooth changeover when Britain leaves the EU, to give companies time to adapt to the new setup, and avoid any wrenching change in the economy or in the financial markets.
That means Britain would not necessarily switch overnight from one regime to another when leaving the EU, which is expected to take place in early 2019.
“Banks located in the UK supply over half of debt and equity issuance by continental firms, and account for over three-quarters of foreign exchange and derivatives activity in the EU,” Mr Carney said.
“If these UK-based firms have to adjust their activities in a short time frame, there could be a greater risk of disruption to services provided to the European real economy, some of which could spill back to the UK economy through trade and financial linkages.”
“These activities are crucial for firms in the European real economy, and it is absolutely in the interests of the EU that there is an orderly transition and there is continual access to those services.”
The Governor has been criticised for his interventions on Brexit in the past, facing accusations that he wanted the UK to remain in the EU and tried to sway the debate.
Presenting the Bank of England’s financial stability report, he sought this time to align himself with Theresa May.
“As the Prime Minister has said, it is preferable that the process is as smooth and orderly as possible,” he said.
“It is preferable that firms know as much as possible about the desired end point [of the Brexit negotiations] and as much as poss as soon as possible about the potential path to that end point.”
That should mean businesses on both sides of the Channel are able to prepare for Brexit when it takes place, minimising any disruption.
“[Finance] firms are making contingency plans for a variety of potential outcomes, as we’d expect them to do. As supervisor, we have direct line of sight to those contingencies, and we know exactly what they currently intend to do under any circumstance,” said Mr Carney.
He believes that the average bank would need less than two years to implement its contingency plans for Brexit, once it knows exactly what it is preparing for.
That sets the scene for a much shorter transition period than the five to 10 years sometimes proposed by finance bosses and lobbyists.
China is the biggest risk to financial stability
Other risks to financial stability identified by the Bank of England include the buildup of debt in China, the potential for Donald Trump’s spending plans to cause the US economy to overheat, political risks in the eurozone, and the increase in household debt in the UK.
“The most significant risks to UK financial stability are global,” said Mr Carney.
“China’s non-financial sector debt has risen…. to 260pc of GDP. This is extraordinary leverage for an advanced, let alone emerging, economy.”
That is an increase from 160pc of GDP at the time of the financial crisis, and the Bank of England fears it leaves China “vulnerable to external shocks”.
Donald Trump could destabilise markets
One such shock could be a sharp rise in US interest rates, potentially prompted by President-elect Donald Trump’s plans to slash taxes and hike government spending.
“A significant fiscal stimulus at a time when the US economy is increasingly operating at close to full capacity … the consequence of that has been an increase in US market rates, the first elements of so-called snap-back risk, and a strengthening of the US dollar,” said Mr Carney.
Snap-back risk is a central banking term for a sharp jump in interest rates, rather than the slow and steady change which officials hope will take place in the coming years.
Higher rates would be expected to push up the dollar and encourage flows of capital from emerging markets and into the US, potentially hitting growth in those markets and creating financial instability.
Britons at risk from debt binge
In the UK the Bank of England noted that households are starting to increase borrowing, for the first time since the financial crisis.
Households’ debt as a proportion of their incomes has fallen by around 20 percentage points since the credit crunch.
That is now increasing, in part because higher house prices mean homeowners need bigger mortgages, but also because credit card debt is on the up.
“The good thing is households and businesses, young families looking to buy a home, can get access to credit, and get it on quite competitive terms,” said Mr Carney, arguing that the low interest rates which encourage this “are necessary for the economy, given the headwinds the economy is facing.”
But he said the Bank of England also has to make sure those loans are being given out responsibly: “We have tools that can help ensure the underwriting standards are responsible, that [the loans] are going to people who are likely to be able to pay off those debts. It doesn't do anybody a favour – the individual, the bank or the economy as a whole – if we slip into a position where that discipline is lost.”
By Tim Wallace
(qlmbusinessnews.com via bbc.co.uk/news – – Mon, 28 Nov, 2016) London, Uk – –
The UK should be careful with its plans to raise the National Living Wage, according to the Organisation for Economic Co-operation and Development.
The OECD said “caution” was needed in the roll-out of the policy, given its possible impact on employment.
In the Autumn Statement, Chancellor Philip Hammond pledged to raise the wage to £7.50 an hour next April.
The OECD also forecast that the UK would have one of the lowest growth rates among G20 countries by 2018.
The National Living Wage was introduced by Chancellor George Osborne in his Budget in July 2015.
It came into effect in April this year, and was set at a rate of £7.20 an hour for workers aged 25 and over, with the aim of increasing it to £9 an hour by 2020.
The UK's Office for Budget Responsibility estimated it would give a pay rise to 1.3 million workers this year.
The OECD said the UK's labour market had been “resilient”, although job creation had moderated recently.
“Real wages have been growing at a time of low inflation, but the fall of the exchange rate has started to increase price pressures,” it said.
“Caution is needed with the implementation of the policy to raise the National Living Wage to 60% of median hourly earnings by 2020.
“The effects on employment need to be carefully assessed before any further increases are adopted, especially as growth slows and labour markets weaken.”
The organisation's stance echoes the widespread claims of business organisations in the 1990s that the introduction of the UK's national minimum wage – which started in 1999 – would lead to widespread job losses.
Those fears proved to be groundless, with the number of people in employment rising from 27 million then to nearly 32 million now.
The OECD says the world economy has been stuck in a low growth trap for five years. It says government spending and tax policies could be used to provide a boost.
The report expects action on these lines from the administration of President-elect Donald Trump in the United States and predicts that will result in a modest boost beyond US borders.
It also suggests that other countries could afford to take similar steps.
But the OECD says that any benefit could be offset if countries resort to measures that restrict trade to protect their own industries.
The OECD predicts that the UK's economy will grow by 1% in 2018, slower than both Germany (1.7%) and France (1.6%).
However, the organisation has raised its UK growth forecasts for this year and 2017.
It now predicts the UK's economy will expand by 2% this year, compared with an earlier forecast of 1.8%, while in 2017 it has lifted the growth forecast to 1.2% from 1.0%.
The OECD said the upward revision was specifically because of Bank of England action and the depreciation in sterling since the Brexit vote.
Looking ahead, the organisation warned that the UK's unemployment rate could rise to more than 5% because of weaker growth.
It also predicted a sharp rise in inflation as the pound's slide against the dollar and euro starts to be reflected in prices in the shops.
“The unpredictability of the exit process from the European Union is a major downside risk for the economy,” it said.
The OECD's forecast for growth in the US has risen since the election of Donald Trump as the country's next President.
It revised its prediction for 2016 up to 1.5% from 1.4%, and next year's estimate to 2.3% from 2.1%. In 2018 it is forecasting 3% growth.
(qlmbusinessnews.com via bloomberg.com – – Mon, 28 Nov, 2016) London, Uk – –
Sky Plc is about to jump into the U.K. wireless market, betting that even as a latecomer it can pry customers away from the four established competitors by harnessing its powerful entertainment brand and millions of existing subscribers.
Prospects for Sky’s mobile offer remain hard to pin down for analysts. Their forecasts for the company’s share of the 15.2 billion-pound ($18.9 billion) U.K. market range from as little as 1 percent to 10 percent, which would bring it close to CK Hutchison Holdings Ltd.’s Three U.K., now the No. 4 player.
The outlook for Sky’s offer remains clouded by a lack of details, including pricing. Guy Peddy, an analyst at Macquarie Bank Ltd. in London, originally estimated Sky could capture about 2 million customers by mid-2021. He’s raised that figure by more than 50 percent to 3.12 million, saying this week in a report that the opportunity is bigger than he thought and the offer is more sophisticated. “Wireless risks for the existing operators are understated,” he wrote.
The type of customer Sky attracts is as important as the number. That’s because its biggest rival, BT Group Plc, has been busy establishing itself on Sky’s home turf in pay-TV. The former U.K. phone monopoly this year expanded its slate of Premier League soccer matches, long a Sky stronghold, and acquired mobile operator EE. That gave it a “quad-play” lineup of fixed and mobile phones, broadband and television. By adding a mobile offering, Sky has a chance to retaliate.
“The fact that they will be entering the quad-play space after BT/EE means that competition for similar customers could be intense by the time they come to market,” Ameet Patel, an analyst at Northern Trust Securities LLP in London, said in an e-mail. EE and Sky will be fighting for a broadly similar subscriber base of “higher-value, more data-hungry users,” Patel said.
Sky says it sees “substantial” potential for the cellular service. What little it has revealed suggests that the company, whose biggest investor is Rupert Murdoch’s 21st Century Fox Inc., is confident it can poach mobile customers from its rivals by bundling services across platforms. Existing Sky customers who indicate their interest in the mobile product online are told it will be “the smart network for your smart phone.”
Sky’s experience delivering content to mobile platforms means the new service is a natural extension, Sky Chief Executive Officer Jeremy Darroch said last week at an investor conference in Barcelona. Sky will first focus on signing up its existing customers, who currently get their mobile service from a range of providers, he said.
“It’s a market where I think we’ve got the right skills to be successful,” Darroch said. Sky’s success with broadband and its high-definition TV service show the company is good at marketing new products, he said. “Our ability to upsell that scale is very, very strong.”
EE had a 29 percent share of U.K. retail mobile subscriptions at the end of 2015, according to industry watchdog Ofcom. It was followed by Telefonica SA’s O2 with 27 percent, Vodafone Group Plc with 19 percent and Three with 11 percent.
Representatives for EE, Three and the Vodafone declined to comment. A Telefonica spokesman said the company will benefit from the traffic generated by Sky because the pay-TV provider is buying space on O2’s network for its mobile offering.
Sky built its pay-TV business on ownership of premium programming like top-flight soccer, rather than discounting, so analysts don’t expect it to try to undercut rivals on price in pursuit of volume. Still, its entry into an already crowded U.K. mobile market will intensify competition.
Some analysts underestimated the growth of Sky’s broadband business. After more than a decade of investments, including the acquisition of Telefonica’s U.K. fixed-line business, Sky has become the second-largest internet provider in the U.K. after BT. Its market share rose to 23 percent in 2015 from 15 percent in 2010, according to Ofcom.
BT mobile subscribers that don’t get broadband from the carrier may already pay for Sky services and may be the most likely candidates for switching to its cellular offering, said Allan Nichols, an analyst at Morningstar Inc. in Amsterdam.
“They’ve been way more successful with their broadband than I ever thought they would,” he said.
Research suggests two-thirds of Sky customers would consider the company’s mobile offering, Stephen van Rooyen, chief executive officer of the U.K. and Ireland business, said at a capital markets day last month. They’ve been able to register since October.
“We’ve long had our eyes on the size of the prize,” he said. “The mobile market is huge.
By Rebecca Penty and Kasper Viita
(qlmbusinessnews.com via bloomberg.com – – Mon, 28 Nov, 2016) London, Uk – –
Consumers and businesses increased their spending in the third quarter as the U.K. economy registered a resilient performance following the Brexit vote.
Household spending rose 0.7 percent from the second quarter and business investment increased 0.9 percent, the Office for National Statistics said on Friday. Growth overall was unrevised at 0.5 percent, with trade providing the strongest contribution. A separate report from the Confederation of British Industry showed retail sales grew at their fastest annual pace in more than a year in November.
The ONS report covers the first full quarter of gross domestic product since Britons upended U.K. politics and roiled financial markets by voting to leave the European Union. While there are few signs of any significant effect for now, growth is expected to slow next year.
In its twice-yearly review, the Office for Budget Responsibility on Wednesday slashed its 2017 forecast to 1.4 percent from 2.2 percent, saying uncertainty will lead firms to delay investment while the falling pound squeezes consumers by pushing up the cost of imports.
“Investment by businesses held up well in the immediate aftermath of the EU referendum, though it’s likely most of these investment decisions were taken before polling day,” said ONS statistician Darren Morgan. “That, coupled with growing consumer spending fueled by rising household income, and a strong performance in the dominant service industries, kept the economy expanding broadly in line with its historical average.”
The jump in business investment surprised economists, who had widely predicted a decline as the Brexit vote took its toll.
“In light of Brexit there was a case for uncertainty holding back investment,” said Alan Clarke at Scotiabank in London. “However, things are never black and white. Projects to build planes, ships, buildings etc. will have been signed off 12-18 months ago and that activity won’t shut off overnight.”
The increase in consumer spending was down from 0.9 percent growth between April and June but in line with the average of recent quarters.
The CBI said its monthly retail sales index rose to 26 in November — the highest since September 2015 — and stores anticipate another gain next month. They may be getting a boost from overseas visitors taking advantage of the weak pound, economists say.
The exchange rate may also be starting to boost trade by making British exports cheaper and imports more expensive. Net trade added 0.7 percentage point to GDP in the three months through September, the biggest contribution since the start of the 2014 and the first this year. Exports rose 0.7 percent and imports fell 1.5 percent.
An index of the dominant services industry rose 0.2 percent in September, leaving output 0.8 percent higher on the quarter. That more than offset declines in industrial production and construction. GDP growth overall was down from 0.7 percent in the second quarter.
By Lucy Meakin
Domino's has an elaborate plan to train reindeer to deliver pizza in northern Japan as a way to deal with potentially harsh winter weather
(qlmbusinessnews.com via bloomberg.com – – Thu, 24 Nov, 2016) London, Uk – –
Despite billions of dollars invested in antihacking technology over the past 10 years, companies appear to have little idea of how to respond to a cyber attack. When Target was hacked during the busy 2013 Christmas season, investigators found the company had missed early warnings that might have prevented the loss of data belonging to 70 million customers. When the news came out, lawsuits were filed, and Chief Executive Officer Gregg Steinhafel resigned. Sony Pictures Entertainment’s fumbling response a year later to North Korean hackers turned a bad situation into a terrible one, costing Amy Pascal, one of the most powerful women in Hollywood, her job as co-chairman.
IBM, which has spent five years buying companies to make itself the world's third-largest cybersecurity provider, wants to train corporate security teams, CEOs, and PR departments to handle those kinds of crises. Shortly after Election Day, the company unveiled a facility that combines gaming techniques and millions of dollars of sophisticated hardware to re-create scenarios like Target’s and Sony’s in white-knuckle, stock-plunging detail.
The idea is borrowed from the Pentagon, which uses a similar approach to train soldiers for cyberwar. Instead of the pressure of combat, the facility at IBM’s security division headquarters on the Charles River in Cambridge, Mass., wants to re-create a postbreach pressure cooker that can move rapidly from a regulatory investigation to a call from the FBI to whatever else the range’s multimedia producers can conjure. “We don’t want to scare the crap out of people,” says Caleb Barlow, vice president of IBM Security. “We do want people to feel a little of the adrenaline burst and the pressure.”
By the time IBM’s cyber range is fully operational in January, it will offer 12 training programs. Think of them as plays, Barlow says, with settings, acts, and an unusually wide range of actors, including general counsels, marketing teams, and C-suite executives.
The staging area is a bit like a flight simulator built for two dozen. Theater-quality video panels cover the front wall, and the ceiling is studded with the same sensors that allowed Tom Cruise to manipulate data with his hands in the movie Minority Report. (The ceiling array, made by Oblong Industries in Los Angeles, is the most expensive thing in the room.) Racks of servers located a floor below simulate the data stream of a full-size corporate network.
During a recent afternoon demo, the training program began with a phishing e-mail sent to a fictitious HR rep. The hackers made off with a cache of data before the IT crew could isolate the source of the breach. Then an insider leaked news of the breach, and the pressure mounted. The U.S. Securities and Exchange Commission initiated an investigation. More pressure.
As the afternoon wore on, events spun out of control. The security team discovered that the hackers hadn’t just stolen information, they’d also altered the company’s financial data shortly before its quarterly earnings report. Uh-oh.
$200 million: IBM spending on its cyber range and teams for intel and incident response
All this realism doesn’t come without risks. The range is designed to test out some of the most virulent malware, so the whole thing is air-gapped, which means it’s not connected to the real internet. Instead, developers collected data from thousands of web pages to create a miniature, self-contained internet.
Like many of the range’s features, that idea came from Joe Provost, the project’s threat modeling and simulation architect and a former master hacker for the National Security Agency. Two days after hackers took some of the world’s most popular websites offline in October with a botnet of infected home routers, TVs, and other internet-connected devices, Provost figured out how to replicate the attack so he could add it to one of the range’s scenarios. In the simulations, he also plays the main bad guy.
The facility is expensive, and IBM wouldn’t say exactly how much it costs to run. Barlow says the company had spent a combined $200 million on the range and the development of cyber intelligence and incident response teams for on-site investigations of major hacks. He may be reticent to break out spending on the facility, because there’s no guarantee the investment will pay off. IBM says it’s not planning to charge people who come in for the training sessions; it’s more of a marketing tool, an effort to convince companies there’s enough value in IBM’s various cybersecurity technologies to make them worth buying. “This is in some ways a grand experiment,” Barlow says.
Roland Cloutier, chief security officer of payroll-services provider ADP, says that based on what he knows of the gaps in traditional cybersecurity training, IBM’s plan should work. “What IBM has been able to do is take two very different processes and combine them into a single training,” he says. “One is technology-based—I have an attack going on, and I have to stop it. But then you have crisis management, which is about leadership in tough situations. That’s a whole different skill set.”
The bottom line: IBM has built a cybersecurity training center to test corporate readiness. Now it has to persuade customers to buy its gear.
By Michael Riley
(Updated second paragraph to correct IBM’s global market position.)
In his first Autumn Statement to Parliament Wednesday, U.K. Chancellor of the Exchequer Philip Hammond will outline a series of measures to help “ordinary working-class families” and stress that a stable economy, fiscal discipline and better productivity are the best ways to raise living standards. Watch the address live right here on YouTube.
(qlmbusinessnews.com via telegraph.co.uk – – Tue, 23 Nov, 2016) London, Uk – –
Housebuilders will receive a major boost in the Autumn Statement today as the Government steps up its affordable housing drive to help address a chronic shortage.
Philip Hammond will use his first fiscal statement since becoming Chancellor to announce a £1.4bn funding injection to help thousands more families to buy a home.
It came as a jump in corporation tax receipts helped to reduce public borrowing last month to its lowest since 2008, handing a boost to Mr Hammond on the eve of the Autumn Statement.
Higher national insurance, VAT and a 24pc jump in corporation tax revenues pushed down public sector net borrowing, excluding public sector banks, to £4.8bn in October, down from £6.4bn a year ago.
This is the lowest October deficit since 2008, according to the Office for National Statistics (ONS), and well below economists’ estimates for a fall to £6bn.
The Chancellor will announce measures today to help renters and aspiring homeowners as part of a pledge by Theresa May, the Prime Minister, to ensure the economy “works for everyone”.
The Government estimates that 40,000 new homes will be built as a result of the funding injection, which will be used to help first-time buyers, existing shared owners who wish to move and former homeowners who can no longer afford to buy.
Mr Hammond will abandon the rigid framework set by the current Affordable Homes Programme, with the £4.3bn of current and £1.4bn of additional funding allocated “flexibly” between existing shared ownership and affordable rent schemes.
Previous plans indicated that 88pc of funds would be used to build at least 135,000 homes for shared ownership, which are targeted at families with incomes of £80,000 or less, or £90,000 in London.
Around 10,000 homes were expected to be built under the Rent to Buy scheme, where prospective buyers pay a discounted rent for five years while saving for a deposit.
Allocations will now depend on demand from local authorities and housebuilders.
The Chancellor’s announcement will be part of a package designed to help people’s money go further and boost living standards as the UK prepares to leave the European Union.
A modest infrastructure boost will be announced alongside a warning from the Government’s independent fiscal watchdog that slower growth due to the Brexit vote will reduce tax receipts and force up borrowing over the next five years to plug the gap between revenues and expenditure.
The Government has borrowed £48.6bn so far this financial year, according to ONS data.
While this is £5.6bn less than a year ago, the Office for Budget Responsibility (OBR), warned last month that the current borrowing target of £55.5bn for this fiscal year was “very unlikely to be met”.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, expects borrowing for the current financial year to be revised up by around £10bn.
Mr Hammond has already abandoned a goal to balance the books by the end of the decade and some economists believe the hit to the public finances could be as large as £100bn over the next five years.
The Chancellor will present new borrowing rules in the Autumn Statement that will give the Government flexibility to respond to fiscal shocks.
A spokesman for the Treasury said Mr Hammond remained “committed to fiscal discipline” and would “return the budget to balance over a sensible period of time”.
Separate data published by the Confederation of British Industry showed factory bosses reported their healthiest order books in November since before the Brexit vote.
Britain’s biggest business group said manufacturers were at their most optimistic about the near-term outlook in nearly two years.
However, its monthly survey showed many were poised to raise prices at the fastest pace in almost three years, reflecting the sharp fall in the value of the pound since the EU referendum result.
By Szu Ping Chan
(qlmbusinessnews.com via uk.reuters.com – – Tue, 22 Nov, 2016) London, UK – –
British finance minister Philip Hammond got some rare good news about the country's finances on Tuesday as he finalises his first budget statement, which is still likely to forecast a surge in borrowing as Britain prepares to leave the EU.
Breaking with a pattern of borrowing overshoots earlier in the financial year, official figures on Tuesday showed public borrowing in October was 25 percent less than a year earlier at 4.8 billion pounds ($6.0 billion), its lowest since 2008 and beating all economists' forecasts.
But Hammond still stands little chance of meeting the budget deficit reduction target for the current financial year which his predecessor, George Osborne, set out in March. He has already abandoned Osborne's goal of reaching a budget surplus by 2020.
Instead, economists predict Hammond could announce more than 100 billion pounds of extra borrowing on Wednesday, as Britain's independent budget office is likely to forecast slower growth, weaker tax revenues and higher social security costs in the wake of June's vote to leave the European Union.
“To put it bluntly, Brexit will be assumed to make the UK poorer which means the government must eventually lower spending, raise taxes, or permanently borrow more,” Bank of America Merrill Lynch economist Robert Wood said.
Hammond played down expectations of much extra spending on public services or infrastructure to cushion the effect of years of uncertainty as Britain negotiates to leave the EU on Sunday, and described debt levels as “eye-wateringly” high.
Britain's Chancellor of the Exchequer Philip Hammond arrives at 10 Downing Street in London, November 2, 2016. REUTERS/Toby Melville/File Photo
Bank of America's Wood said he expected Hammond to announce extra discretionary stimulus that amounted to just 0.5 percent of gross domestic product, in part because he may want to keep his powder dry in case of a sharper economic slowdown.
This could include freezes to taxes on vehicle fuel and air travel, and modest further investment in infrastructure such as roads and broadband internet connections.
Britain's economy has slowed much less than most economists forecast since the Brexit referendum, and on Tuesday the Confederation of British Industry reported the fastest growth in factory orders since the June 23 vote.
But analysts see tougher times ahead for households as a 15 percent fall in the value of sterling against the dollar feeds into higher prices.
The public finances were underperforming even before the Brexit vote. Borrowing since the start of the tax year in April is 10 percent lower than in the same period of 2015 at 48.6 billion pounds, the Office for National Statistics said, versus a 27 percent fall needed to meet Osborne's 55 billion pound target for the whole tax year.
“The government is committed to fiscal discipline and will return the budget to balance over a sensible period of time, in a way that allows space to support the economy as needed,” a finance ministry spokesman said after Tuesday's data.
Britain's budget deficit was 4 percent of GDP last year, down from 10 percent at the height of the financial crisis but still more than almost all other big economies.
The ONS said net public debt rose to a record 1.642 trillion pounds in October, equivalent to 83.8 percent of gross domestic product.
October's improvement in the public finances was driven by faster growth in tax revenues. Overall these were up 6.8 percent on the year, with particularly strong growth in corporation tax. The ONS was not able to say if the trend was likely to last.
By David Milliken and Andy Bruce
(qlmbusinessnews.com via uk.reuters.com – – Mon, 21 Nov, 2016) London, UK – –
Facebook (FB.O) said it would expand its presence in Britain by 50 percent in 2017, joining other U.S. technology firms in increasing investment despite the uncertainty sparked by the country's vote to leave the European Union.
The social network firm said it would hire 500 new staff, adding to the 1,000 people it already employs in Britain, as Facebook gears up to open a new UK headquarters in London next year, following other firms drawn by talent and a thriving tech start-up scene.
Before the Brexit referendum in June, campaigners in favour of remaining in the EU had warned that international companies could seek to reduce their presence in Britain as a withdrawal from the bloc would make it a less attractive place to invest.
Some big banks such as Goldman Sachs (GS.N) and Citi (C.N), which employ many thousands in London's financial centre, are said to be considering shifting some jobs elsewhere in Europe as a result of Brexit, a worry for the British economy where financial services account for around 10 percent of output and provide some of the best paying jobs.
Facebook's UK expansion comes after Google (GOOGL.O), owned by parent company Alphabet Inc, said earlier in November that it would invest an estimated 1 billion pounds, and make 3,000 new hires in the Britain.
“The UK is definitely one of the very best places to be a technology company,” Facebook vice-president of Europe, Middle East and Africa Nicola Mendelsohn said at a conference run by the CBI, an employers group, adding that it was too early to say what Brexit would mean for the movement of labour.
“The movement of talent is something…that matters to us.” she said, adding that Facebook employs people of 65 different nationalities in Britain.
Facebook opened its first engineering office outside the U.S. in London in 2012 and has been growing rapidly in the UK since. Its main UK operating unit's staffing increased by 90 percent in 2015 from 2014, according to its latest accounts, with more than half of those hired engineers.
It also employs hundreds of sales and marketing staff who tend to focus on larger clients or running regional teams, according to Facebook job ads and linkedIN profiles of staff.
Amazon (AMZN.O), which created 3,500 UK jobs in 2016 at its head office, research and development centres, customer service centres and distribution depots, plans a further 2,300 jobs at three new distribution centres in 2017.
Such investments have helped Britain's tech sector to shine at a time when some other firms are less optimistic.
A recent survey showed that three out of four companies with sales between 100 million pounds and 1 billion pounds have considered moving operations to the European continent in the wake of the vote.
Mendelsohn said that Britain needed to work hard to keep its position as a global hub for technology.
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“We need to make sure that we continue to look outwards and not inwards; we need to stay competitive, and we need to remain a welcome home to tech,” she said.
London ranked no.1 for start-ups in the 2016 European Digital City Index, and Google said the talent pool, educational institutions, and passion for innovation helped it decide to invest more in Britain, sentiments echoed by Mendelsohn.
“It's a place that our engineers want to come and work at, it's a place that we see this amazing ecosystem, not of just tech companies but also of creative companies coming together inspiring, fuelling one another,” she said.
Facebook has a complex corporate structure for tax purposes and declared Dublin as its European headquarters which means almost no taxable profits are reported in the UK. It also has significant historic tax losses on its books, which means any cut in corporation tax would have little impact on its finances.
UK Prime Minister Theresa May is reported to be considering cutting corporation tax from the 20 percent headline rate in a move to attract companies away from other parts of the EU to Britain.
(Additional reporting by Tom Bergin; Editing by Kate Holton and Alexander Smith)
By Sarah Young | LONDON
Snap Inc., the parent company of Snapchat, has filed confidentially for an initial public offering, according to people familiar with the matter.
(qlmbusinessnews.com via telegraph.co.uk – – Fri , 18 Nov, 2016) London, Uk – –
The UK high street is losing another retail name as office stationery chain Staples shops will close following a £1 deal with a turnaround firm.
The move comes after US parent, Staples Inc, hired KPMG to explore options for its European operations after its attempted $6bn (£4.8bn) merger with US rival Office Depot was blocked by regulators.
Hilco, known for its turnaround of HMV, is buying Staples' UK business and is planning to phase out Staples 106 shops across the country, which employ more than 1,100 staff in total.
Paul McGowan of Hilco Capital said: “We are pleased to have concluded a transaction with Staples, Inc. and look forward to working with the UK team.”
“While retail in the UK has been challenged recently, a team led by retail veteran Alan Gaynor will work alongside the existing management team to build a plan for success for the business.”
Staples has online and business-to-business operations which could continue to trade.
“Agreeing to sell our UK retail business to Hilco aligns with our strategy of focusing on our North American and mid-market business, and is a meaningful step in that process,” said Staples chief executive Shira Goodman. She added that the company is still “evaluating strategic alternatives for the remainder of Staples Europe”.
Last month, the Telegraph reported that investment firm Cerberus, which bought billions of UK and Irish bank assets in the wake of the financial crisis, was in negotiations over a rescue deal for the Staples' European business, which includes 200 stores, for a nominal sum.
Staples has struggled for years as revenue declines and demand wanes for traditional office basics such as folders, ink cartridges and filing cabinets, and as shoppers hunt for bargains online. However, a restructuring plan last year meant that UK sales grew by 7pc to £116m and the business returned to the black with £3.4m of profits.
Staples’ difficulty follows the collapse of high street chains BHS, Austin Reed, American Apparel, My Local and Store 21 this year.
By Ashley Armstrong
(qlmbusinessnews.com via telegraph.co.uk – – Thur, 17 Nov, 2016) London, Uk – –
Property investors will face tough new mortgage affordability tests from next year which will herald the “beginning of the end of the middle-class buy-to-let dream”, experts have warned.
Philip Hammond, the Chancellor, announced additional rules on buy-to-let which will result in ordinary investors being able to borrow far less towards their purchase.
Mr Hammond indicated he was concerned about “financial stability” following a boom in residential property investment as savers desperately try to find profitable places to put their money.
Many have turned to buy-to-let to fund retirement income after being effectively barred from putting more money in to their pensions by the Government. Low mortgage rates have made the investments attractive.
However, ministers have recently targeted buy-to-let properties with aggressive new taxes, including higher rates of stamp duty and the removal of tax relief on mortgage interest.
Experts fear that the announcement will make the investments unaffordable for many middle class people, closing down another potential saving opportunity.
Mr Hammond and Theresa May, the Prime Minister, are expected to come under pressure to ease the burden on savers with new tax breaks or government help in next week's Autumn Statement.
Under the plans to give the Bank of England extra powers, affordability checks are to be introduced for investors, who will now have to prove they can make a profit of 25 per cent profit from tenants even if large interest rate rises make their mortgage more expensive.
The Chancellor said: “It is crucial that Britain’s independent regulators have the tools they need to keep our financial system as safe as possible.
“Expanding the number of tools at the Financial Policy Committee’s disposal will ensure that the buy-to-let sector can continue to make an important contribution to our economy, while allowing the regulator to address any potential risks to financial stability.”
Ray Boulger, from John Charcol, a mortgage adviser, said: “The rationale for these stress tests are the same as those which were brought into the residential market to avoid people being unable to repay their mortgages if interest rates rise.
“If interest rates were to move up quickly that would cause buy-to-let investors a huge problem as they are too acclimatized to low rates. If rates rose sharply and they were unable to repay their mortgages en masse the market could suddenly be flooded with properties.”
From Jan 1 the Prudential Regulation Authority, the lending arm of the Bank of England, will impose new minimum affordability thresholds which will reject borrowers who make less than 25 per cent profit from their investment, or would no longer be able to afford mortgage repayments if interest rates rise to 5.5 per cent.
For example, someone with a £200,000 interest-only mortgage borrowing at 1.79 pc would have monthly mortgage payments of £299.
However, as these repayments would rise to £917 if their rate of repayment interest rose to 5.5 per cent, they would need to prove they could charge rent of £1,146 a month to be approved for the mortgage.
As the Bank rate is currently at a record low of 0.25 per cent, mortgage deals are cheaper than ever with many charging less than 2 per cent interest.
Andrew Montlake, director at Coreco, a mortgage broker, said: “Many people will see this as the beginning of the end of the middle class buy-to-let dream which is a big shame. “
Until recently middle-class savers have helped fuel a buy-to-let boom in Britain with more than two million savers funnelling cash into rental properties to help fund their retirement.
The Bank is forcing lenders to “toughen up” over concerns they have relaxed standards for landlords.
Prior to the announcement of the Bank's new rules, some lenders went further and tightened their criteria voluntarily with some, including Nationwide, now refusing to lend to landlords making rental profits of less than 45 per cent of their mortgage repayments.
When the building society announced the change in April this year, Paul Wootton, managing director of its buy-to-let arm, The Mortgage Works, said the move was a response to the change on tax relief.
He said: “This change is a proactive move that recognises the need to help safeguard rental cover for landlords over the coming years, and in advance of the forthcoming changes to mortgage interest tax relief.”
While would-be landlords are being locked out of the market, current landlords are rapidly looking to sell, studies have indicated.
One survey of almost 1,000 experienced private landlords by the Residential Landlords' Association found a quarter of buy-to-let investors are planning to sell their rental properties as a result of the Government tax changes.
By Katie Morley
(qlmbusinessnews.com via bloomberg.com – – Mon, 14 Nov, 2016) London, Uk – –
When bills for a corporate credit card used by Karhoo Inc. Chief Executive Officer Daniel Ishag arrived, employees in the London office of the car-hailing startup often spotted unusual purchases. There were designer shoes and clothing, along with veterinarian’s bills for a pet dog. The employees flagged the costs as potentially non-business related, but signs of lavishness continued — first-class flights, a blowout in Las Vegas, Cuban cigars.
Ishag’s spending, described by several employees and those familiar with Karhoo’s finances, came to an abrupt end this week when the company shut down after running out of money. As the extent of the startup’s financial problems became known in recent weeks, Ishag stopped coming to the office and two other executives embarked on a futile attempt to keep the firm afloat, said the people, who asked not to be identified for fear of damaging career prospects. About 200 people lost their jobs.
Ishag did not respond to phone calls, e-mail or LinkedIn messages seeking comment. Some of the money was reimbursed, according to a person familiar with the costs. Employees said they didn’t know where Ishag was currently. In an e-mail to employees this week, he apologized for the company's collapse.
“I deeply regret the impact and inconvenience recent events have caused you all,” Ishag said in the e-mail. “I feel responsible, not only to you but also to your dependents as well, and wanted to extend my apologies to you all. I truly wish things had turned out very differently.”
Even by the standards of tech startups that fail more often than not, Karhoo’s demise is extraordinary. Before the company’s price-comparison app for hailing a taxi was released, Karhoo grabbed headlines last year when it reportedly raised $250 million and said it had plans to bring in more than $1 billion. In fact, it never raised that much. According to internal financial documents, it had raised $39 million as of September and was bleeding money as it attempted to take on Uber Technologies Inc. In its two-year life, Karhoo generated about $1 million in net revenue, according to the records shared with Bloomberg.
Karhoo employees said they were largely unaware of its dire position until a recent Friday, when managers told them the company didn’t have enough funds to make payroll. There were no severance packages and people weren’t paid for the previous month’s work. People were furious. As the announcement was made, Ishag had been in Singapore in a last-ditch effort to raise more money, two former employees said.
Many employees were left wondering how the company could have blown through what they thought was $250 million in the bank. Some of them joined Karhoo because they were told in interviews that the company had raised that much money, making it more stable than a typical startup. After the figure appeared in U.K. news reports, company executives also cited it in meetings with potential business partners, according to people who attended.
Some workers had been confident in the company’s trajectory, after its app was downloaded nearly 300,000 times since it was introduced in May.
The company spent heavily to expand globally, several employees said. Long before the app was launched, Ishag opened offices in London, Singapore and Tel Aviv and built a marketing staff of more than two dozen. The company rented apartments in New York, including one at a cost of $12,000 per month, said a person with direct knowledge of the cost. The company also had a 10-year lease on an office in New York.
Ishag touted Karhoo as an upstart competitor to Uber. Its app aggregated cars available from non-Uber taxi and car services, allowing customers to pick from them. But the launch, originally scheduled for January 2016, was pushed back to May.
As Karhoo introduced its service in London and several other U.K. cities, Ishag was attempting to raise more money. One person involved in the process said Ishag was at one point seeking a $400 million valuation. To entice investors, he had to show that customers were using the service in droves to hire taxis, several former employees said.
The company began an aggressive promotional campaign in which it gave away codes for free rides, according to former employees. But the service had a bug that didn’t properly process the codes, meaning customers could use them over and over again. Some people on social media said they had taken more than 100 free rides. The company had to pay drivers or taxi companies even though Karhoo didn’t receive any money from customers. In October, about 70 percent of its bookings were with promo codes, according to sales documents seen by Bloomberg.
The app’s payment processing system also didn’t have many fraud protections, such as verifying a user’s address or requiring an e-mail address to set up an account, several people said. At one point, more than 90 percent of passengers’ credit-card payments were being rejected as a result of the problems, three people said.
Customer service was such an issue that Karhoo hired an outside contractor to handle it. The company, ModSquad Inc., is owed nearly $500,000, according to a breach-of-contract suit filed against Karhoo in New York. One employee said Karhoo canceled the contract after it realized the cost of ModSquad's service equated to about $3 per ride each customer was taking — more than it was taking in total after paying drivers. Several taxi companies that are owed money have been calling former Karhoo employees seeking payment, one person said.
Karhoo and ModSquad are scheduled to appear on Dec. 8 in the U.S. District Court in New York. When contacted, Erik Anderson, the lawyer representing ModSquad, said he couldn't comment about ongoing litigation.
Employees described Ishag as persuasive and said he often talked about “creating a reality” for the company. He also gave himself perks like smoking in the office, flying first class and staying in top hotels, while staff members flew in economy and slept at budget inns.
When his dog, a pug, required a medical procedure, about $6,000 was charged for a veterinarian, two people familiar with his expenses said. In Las Vegas for a technology conference, he threw a party with drinks, exotic dancers and party favors that included Cuban cigars with Karhoo’s logo, two people said.
The company approached one of the Las Vegas party attendees later to see if he wanted to invest. Having seen what was spent at the party, the person demurred, according to a person involved in the fundraising attempt.
Ishag’s career started at age 17 when he left his London school and went to India to start his first business. In 2000, he was one of three founders of an online advertising group called Espotting, which used a network of search engines to deliver targeted traffic to advertisers. Ishag’s next move was to become CEO of waste-management company Bluewater Bio Ltd., which went public in 2007 and then got taken private again. He spent eight years there before departing.
Ishag said in a July interview with the online publication Startup that he got the idea for a comparison app for ground transport while in California and then decided to develop a prototype in India before raising money for Karhoo from investors. A cousin, David Ishag, joined the company’s board as chairman. David Ishag didn’t respond to a LinkedIn message seeking comment.
The company has dozens of backers, including Eric Daniels, the former CEO of Lloyds Banking Group Plc, who said his investment was “modest.” Other reported backers include Nick Gatfield, former chairman and CEO of Sony Music Entertainment; Jonathan Feuer of the private equity firm CVC Capital Partners; and David Kowitz, co-founder of Indus Capital Partners. Feuer declined to comment. Gatfield and Kowitz couldn’t be reached.
The company closed down owing $30 million to creditors, employees, property managers, advertising agencies and other contractors, according to one person who has seen the figures.
Ishag wasn’t seen around the company’s offices as employees boxed up their belongings and left. In the e-mail, he thanked them for working without pay.
In the interview with Startup, Ishag discussed the challenges of building a tech venture.
“If someone wants to do something special or difficult, that person has really got to focus all their efforts,” he said. “It takes a toll; it takes a toll on the people around you. It takes a toll on your partner if you’ve got one, or on your wife. That’s why I’m saying, as an entrepreneur, it is a way of life because it does affect everything you do.”
By Adam Satariano and David Hellier