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The London Stock Exchange faces yet another setback after Scottish Widows, one of the UK's largest pension funds managing £72bn in assets, said it plans to drastically reduce its UK equities allocation. The fund intends to cut its allocation from 12% to 4% in its highest growth portfolio and from 4% to 1% in its conservative portfolio by January 2026. The decision is part of a broader strategy to increase exposure to US equities and reflects a retreat from UK investments. Simon French, Chief Economist at Panmure Liberum, said the move "was an inevitable reaction" to the recent Mansion House Accord, with funds poised to sell down their UK stock holdings to compensate for the increased spend on UK private assets. This allows them to keep their overall exposure to the UK unchanged. Scottish Widows said that its "new and enhanced pension proposition - Scottish Widows Lifetime Investment - takes a market weight allocation to global equities by default, in line with similar propositions from other pension providers."

 

Financial Times

The Daily Telegraph

City AM

The UK government has published guidance on how it will consider fresh applications for oil and gas projects. Operators will now have to draw up new environmental impact assessments that take emissions released from burning oil and gas into account - not just the emissions from production. The move will determine whether production can go ahead in the controversial Scottish fields Rosebank and Jackdaw, although gives no indication as to whether ministers would give their approval. Energy Minister Michael Shanks said the guidance provided clarity on the way forward for the North Sea oil and gas industry.

 

BBC News

A tribunal has determined that refusing employment to individuals from nations deemed security threats, such as China and Russia, does not constitute discrimination. The case arose when Tianlin Xu, a Chinese scientist, sued Binary AI Ltd after being denied a £220,000 lead AI position due to security concerns. Employment Judge Richard Baty said: "It is paramount that the security and operational capability of the software that drives our everyday lives should remain intact." The tribunal concluded that the rejection was based on national security requirements rather than racial discrimination, and emphasised the necessity of stringent security measures in sensitive roles.

 

The Guardian

Daily Mail

A former Janus Henderson analyst who used working from home during the Covid-19 pandemic as a cover for insider trading has been found guilty in one of the most high-profile UK insider dealing cases in recent years. Redinel Korfuzi was accused of using information he accessed through his job as a research analyst at the asset manager to trade using accounts held by his sister Oerta Korfuzi and two other co-defendants. Prosecutor Tom Forster told jurors at the start of the trial at Southwark Crown Court in February that the defendants made a profit of around £963,000 in relation to 11 companies' shares in just over six months.

 

Financial Times

The Times

Nick Ephgrave, the director of the Serious Fraud Office (SFO), is set to enhance efforts against white-collar crime by recruiting whistleblowers and undercover agents. Ephgrave aims to leverage his experience from the Metropolitan Police to tackle complex corporate crime more effectively. "Fraudsters are just criminals acting in a different sphere," he said. "They’re cheating ordinary people, taking money, and damaging the country – the same as gunrunners, drug smugglers and all the rest. We should therefore use as much of the tactical armoury that we can against them. That was something I brought in from my policing background, and we are continuing to build that capability."

 

The Daily Telegraph

The discovery of a report on the Capture accounting software, used in over 2,000 Post Office branches from 1992 to 1999, has raised hopes of overturning wrongful convictions linked to the faulty system. The report, described as "hugely significant" by Neil Hudgell, the lawyer representing over 100 victims, was found by retired computer expert Adrian Montagu. It highlights that Capture was "an accident waiting to happen" and capable of producing "absurd gibberish" leading to accounting errors. The report was reportedly known to the Post Office in 1998 but was not disclosed during trials, including that of Patricia Owen, who was convicted in 1998. Her daughter, Juliet, expressed her distress, saying: "To know that in the background there was Adrian with this [report] that would have changed everything." The report is now with the Criminal Cases Review Commission, which is investigating 28 Capture cases.

 

Sky News

Tata Consultancy Services (TCS) has said that its systems were not compromised during the recent cyber attack on its long-time client, Marks and Spencer. Independent director Keki Mistry explained: "As no TCS systems or users were compromised, none of our other customers are impacted." The incident, which M&S disclosed in April, is expected to cost the retailer approximately £300m in lost operating profit, with online service disruptions anticipated until July.

 

Reuters

European antitrust regulators have conditionally approved UniCredit's acquisition of Banco BPM, requiring the sale of 209 branches in northern Italy to address competition concerns. The EU rejected a request from the Italian competition authority to assess the merger under national law, despite Italy invoking its "golden powers" due to national security issues. UniCredit is contesting the government-imposed conditions, with a court hearing scheduled for next month.

 

The Times

The UK's Competition and Markets Authority (CMA) is set to conduct a review of road and railway infrastructure projects due to ongoing delays and cost overruns. The initiative follows the government's announcement of a £37bn increase in HS2 costs and a two-year delay. The review aims to address "persistent issues around cost and delivery" and will assess whether procurement and regulatory processes hinder market growth.

 

City AM

Consumer confidence in the UK has seen a slight increase, with GfK's consumer confidence index rising by two points in June, despite the economy contracting by 0.3% in April. The index remains in negative territory at minus 18, four points lower than last year. Neil Bellamy, consumer insights director at NIQ GfK, noted that the rise in confidence reflects improvements in consumer perceptions of the economy. However, with petrol prices expected to rise due to escalating tensions in the Middle East and ongoing tariff uncertainties, Bellamy warned that "there is still much that could negatively impact consumers." Meanwhile, a British Retail Consortium survey indicated that 34% of people expect economic improvement in the next three months, up from 28% in May. 

 

Financial Times

The Times

London was the only UK region where labour productivity fell below pre-pandemic levels in 2023, official data shows. The capital’s efficiency lead has been narrowing since before the financial crisis.

 

Financial Times

The UK's tax gap has increased significantly. HM Revenue & Customs (HMRC) reported a loss of £46.8bn in tax liabilities for the 2023-24 financial year, equating to 5.3% of total theoretical tax liabilities. The gap, which represents the difference between taxes owed and collected, was £39.8bn or 4.8% in the year prior. Small businesses now account for 60% of this gap, an increase from 48% in 2019-20. HMRC noted that the tax gap attributed to criminals has decreased from 12% to 9% over the same period. Additionally, individuals and wealthy individuals contribute to 10% of the overall gap, with uncollected corporation tax making up the largest portion at 41%.

 

Financial Times

The Daily Telegraph

Daily Mail

The I

Analysts warn that regulatory pressures could make Close Brothers a target for acquisition. The bank's shares have dropped 15% this year, despite a recent recovery to around 368p. Analysts at Moody's noted that the firm could be "taken over if regulatory investigations into its motor finance business were to result in financial penalties that weakened its solvency." With a loan book nearing £10bn, Close Brothers' potential acquisition could further consolidate the market, reinforcing the dominance of major banks like Barclays and HSBC. The bank has set aside £295m for provisions, but RBC analysts predict costs could rise to £450m, which may jeopardise its compliance with regulatory requirements.

 

City AM

B&M has announced plans to relocate its corporate domicile from Luxembourg to Jersey, as it aims to simplify its corporate structure and enhance shareholder capital returns. The move will also ensure B&M is fully subject to the UK takeover code and dividends will not incur a withholding tax. Despite a drop in pre-tax profit from £498m to £431m for the year ending March 2025, B&M's revenue increased from £5.3bn to £5.5bn. The company says it is optimistic about future growth, with new CEO Tjeerd Jegen at the helm, following the departure of Alex Russo.

 

City AM

Institutional Shareholder Services, the influential investor advisory group, has urged JD Sports shareholders to reject the company's proposed remuneration policy. The plan suggests a maximum of 50% of salary in restricted shares and 250% in performance shares, aimed at keeping pace with US competitors. However, the advisory group said that this proposal comes "against the background of decreased profits, a share price that has fallen, and in the context of difficult and uncertain market conditions support is not considered warranted." JD Sports maintains that the amendments are in the best interests of shareholders.

 

The Times

German insurance firm Allianz plans to cut 650 UK jobs. Staff in its commercial, speciality and personal insurance business are set to be let go as the firm looks to become "a simpler, digital-led, leaner business." Allianz, which employs around 6,000 people across the UK, said the move comes "in response to shifting preferences towards digital, self-service customer support and changing market dynamics."

 

City AM

Aviva CEO Amanda Blanc has said that the company will not pursue overseas acquisitions, asserting that doing so would mean she has "lost the plot." Since taking charge in July 2020, Blanc has focused on streamlining Aviva by selling off non-core businesses, raising over £8bn, and enhancing capital returns to investors, which have totalled £10bn since 2020. Aviva's acquisition of Direct Line is set to complete next month.

 

The Times

Workers at Encirc, a major UK wine supplier, have commenced a 16-day strike amid a pay dispute. The strike involves around 200 Unite members at the company's Avonmouth site, which bottles 18 of the UK's 20 most popular wine brands. Unite general secretary Sharon Graham said: "Encirc's meanness to its workers is all about greed and not need." She noted the company's profitability and refusal to negotiate fair pay. Encirc, which holds a 40% market share, has offered a 3.2% pay rise without negotiation. Unite regional officer John Sweeney warned that the strike would undoubtedly affect wine availability, and urged Encirc to return to the negotiating table.

 

The Times

Daily Express