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European Edition
21st November 2023
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THE HOT STORY
Palantir wins £480m health service IT contract
The tech company founded by US billionaire Peter Thiel has won a £480m contract handling NHS patient data. Palantir, which is best known for its work with intelligence and military agencies in the US, put in a joint bid with professional services company Accenture for the so-called “federated data platform” to join up medical information across the health service. Health officials say the software will allow analysts to spot patterns in illness and use resources better. Government ministers have said it will not be able to see individuals’ data.
ECONOMIST IMPACT REPORT
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CYBERSECURITY
Samsung warns customers after massive data breach
Samsung has issued a warning to its customers after a massive data breach that may have exposed personal information. Hackers gained access through a Samsung application, potentially leaking names, addresses, phone numbers, and emails of customers who made purchases from Samsung UK's web store between July 2019 and June 2020. However, financial information was not affected. Samsung assured customers that passwords and financial data were not impacted. The cybersecurity incident only affected UK customers and did not impact US customers, employees, or retailer data.
British Library confirms ransomware cyber attack
An investigation has been launched into a ransomware attack on the British Library, which has caused a major outage affecting services and Wi-Fi access. The probe is being supported by the National Cyber Security Centre and Metropolitan Police. The library confirmed that the attack was carried out by Rhysida, a cyber-crime gang which has demanded £600,000 for data relating to staff passports and HMRC employment records.
Optus CEO resigns after network outage and data breach
The CEO of Optus, Australia's second-largest telco, has resigned after a network-wide outage and a major data breach. Kelly Bayer Rosmarin's resignation comes after a parliamentary hearing where Optus executives admitted to having no contingency plan for such an outage. Chief Financial Officer Michael Venter will serve as interim CEO. Rosmarin had led Optus through the data breach scandal and the recent network blackout that affected over 10 million Australians. Singtel, Optus' parent company, stated that a fault in Optus' security systems caused the outage. Despite the challenges, Rosmarin improved Optus' market share and financial performance. Optus now aims to regain customer trust and confidence. Peter Kaliaropoulos has been appointed as the new Chief Operating Officer. "We recognise the need for Optus to regain customer trust and confidence," said SingTel Group CEO Yuen Kuan Moon.
REPUTATION
The CBI conference makes its return
The Times reviews the CBI conference held on Monday as the business lobby group scrambles to recover from a sexual misconduct scandal that sparked an exodus of members eight months ago. The CBI’s first significant public event since then hosted 400 delegates and was seen as a relaunch moment. Chancellor Jeremy Hunt agreed to address the event, a move some said helped salvage the conference. Jonathan Reynolds, Labour’s shadow business secretary, also gave an address, but Rishi Sunak’s absence was conspicuous. The CBI was “on its way back as a smaller, less-resourced voice for big business,” one source told the paper.
ECONOMY
'Far too early' to talk about rate cuts – Bailey
The Bank of England governor warned on Monday that it was too early to declare victory over inflation, asserting that there was more work to do to bring inflation back to its 2% target. Addressing an event in London, Andrew Bailey said policymakers needed to be alert to the threat that previous increases in the cost of food and energy would have knock-on effects on prices and wages. “Food prices tend to be very salient to consumers and closely linked to inflation expectations, so the evolution of food prices will matter for wage growth looking ahead,” Bailey said. “While the inflation data for October released last week were welcome news, it is much too early to declare victory. Inflation remains too high, and we need to make sure we get it all the way down to the 2% target.”
British Land CEO urges overhaul of planning regime for UK life sciences sector
Writing for City AM, Simon Carter, the chief executive of British Land, highlights the urgent need for an overhaul of the planning regime in the UK life sciences sector. He emphasises the importance of creating more space for innovation and growth to attract world-leading companies. The UK currently lags behind the US in terms of laboratory space, and Carter suggests that attracting more funding and investment, as well as improving transport links and expanding R&D tax credits, are key steps to boost the sector. British Land and Savills have proposed a five-point plan to support the growth of the life sciences sector, including setting clear targets for growth and building efficient transport links.
Nearly 500,000 are out of work due to an unhealthy lifestyle
A new report reveals that nearly 460,000 people in the UK are unemployed due to the consequences of health-harming products, resulting in a loss of £31.1bn from the economy. The report, commissioned by Action on Smoking and Health (Ash), the Obesity Health Alliance, and the Health Alliance (AHA), highlights the impact of smoking, alcohol, and obesity on employment and the economy. The analysis shows that 289,000 people are not working due to poor health caused by smoking, while 99,000 are unemployed as a result of illness caused by alcohol, and 70,000 are unemployed because of weight-related health conditions. The report calls for regulation to protect public health and reduce the consumption of harmful products.
INVESTMENT
Key firms advising Labour on private investment
HSBC, Santander and Blackrock are among those advising the Labour Party on private sector investment following the launch of a new infrastructure council. Shadow chancellor Rachel Reeves led the first meeting of the British Infrastructure Council (BIC) on Monday. Members also include M&G, IFM Investors, Pension Insurance Corporation, Phoenix Group, CPP Investments, Border to Coast, CDPQ, Lloyds Banking Group, and Fidelity International – who Labour say are all involved in an independent advisory capacity. Phoenix Group chief executive Andy Briggs said: “Currently only 9% of UK pension funds are invested in alternative assets, compared to 23% in other major markets. If we get this right, Phoenix Group could invest up to £40bn in sustainable and/or productive assets to support economic growth and the climate change agenda.”
Private equity resorts to buying back companies after IPO flops
EQT, Cinven and Silver Lake are among the private equity firms taking portfolio firms private shortly after floating them in a bid to salvage investments that have struggled to perform on stock exchanges.  
LEGAL
Supreme Court to decide if Deliveroo riders should be classified as ‘workers'
The Supreme Court will make a landmark ruling this week about whether Deliveroo riders in London should be classified as "workers." The decision is highly anticipated by those in the gig economy. The legal battle, which has spanned seven years and multiple English courts, revolves around the riders' ability to form a collective bargaining unit. The Independent Workers' Union of Great Britain (IWGB) has challenged the classification of riders as "self-employed" rather than "workers."
CORPORATE
Lenders seize control of Cazoo
Bondholders have taken control of online motor retailer Cazoo as the company struggles under £649m of debt. Cazoo’s value has slumped more than 99% since it went public on the New York Stock Exchange in 2021. The debt for equity swap will dilute chairman and founder Alex Chesterman’s shareholding from 24% to less than 2%. Holders of $630m (£503m) of Cazoo debt will receive $200m of new bonds and shares “which will represent 92%” of stock in the company, the company said in a market statement. The company is currently valued at $14m.
LSEG names Publicis finance chief Michel-Alain Proch as CFO
The London Stock Exchange Group has named Michel-Alain Proch as its new finance chief, starting March 1, 2024. Proch, who currently serves as group CFO of advertising group Publicis, takes on the role from Anna Manz, who stepped down in May.
STRATEGY
EY in talks to abandon London HQ
Big Four accounting giant EY is reportedly in talks to quit its London headquarters as staff increasingly work remotely. The firm has launched a property review of its More London office, near London Bridge, in preparation for EY’s 25-year lease on the building expiring in 2028. Demand for office space in London has plunged as many bosses give up on attempts to lure workers back to their desks. Many companies are now downsizing and around 10% of offices in central London currently sit empty. An EY spokesman said: “As a growing business with over 20 offices across the UK, we continually review our real estate footprint. We do not comment on speculation.”
TECHNOLOGY
AI ‘hit squad’ to be set up to cut size of UK civil service and boost productivity
Deputy Prime Minister Oliver Dowden plans to establish an artificial intelligence “hit squad” unit with a remit to shrink the size of the UK civil service and bolster public sector productivity, including the speeding up of government processing of asylum, immigration and welfare claims. The Cabinet Office, which coordinates government departments, proposes to employ between 20 and 30 experts in a so-called “incubator for AI,” at an initial cost of about £5m. “Welfare and tackling welfare fraud, looking at what we can do around the interface with the health service, and looking at what we could do around asylum and immigration processing are three obvious areas where we’ve tasked them initially,” Dowden said.  “What I see with this is a transformative tool to be able to enhance the pace of technology in a way that can help us deliver better outcomes with fewer inputs, and ultimately, that should be able to save taxpayers money,” he said.
OPERATIONAL
Chancellor urged to tackle ‘unacceptably poor service’ at HMRC
The Association of Chartered Certified Accountants (ACCA) has called on Jeremy Hunt to accelerate plans to improve HMRC’s performance amid growing frustration about poor service and long delays. The tax office is currently struggling under an 18-month backlog of correspondence and delays as thousands of staff continue to work from home. The ACCA urged Mr Hunt to use Wednesday’s Autumn Statement to announce further funding to help resolve cases quicker. Over half of ACCA’s accountants blamed HMRC for hurting the productivity of their business.
TAX
New tax rule to fine content creators for undeclared earnings
The HMRC is set to fine content creators who have not declared their earnings, as a new tax rule comes into force. A recent survey found that 24% of content creators in the UK admit to not declaring their earnings and paying the taxes owed. This will now be considered tax evasion, punishable by heavy fines or imprisonment. Liam Quirk, CEO of Quirky Digital, warns content creators to seek advice from a tax professional and take steps towards tax compliance. The new tax rule will apply from January 1, 2024, and will require apps and websites to report earnings of their users to HMRC.
SECURITY
Abu Dhabi-backed fund closes in on Telegraph
An Abu Dhabi-backed investment fund is poised to take control of the Telegraph newspaper and Spectator magazine. It comes five months after the publications were taken over by Lloyds Banking Group as it sought to recover debts owed by the Barclay brothers. RedBird IMI is a joint venture between US firm RedBird Capital and International Media Investments, which is owned by Abu Dhabi royalty. If the deal is successful, Redbird IMI would have the right to turn the loan into equity, handing it control of the titles. A spokesman said The Telegraph’s operations will be solely managed by RedBird Capital with IMI taking a passive role, distancing editorial matters from the Gulf state. More than half a dozen Conservative MPs have called for the deal to be probed on national security and press freedom grounds and MPs on the Commons culture committee are expected to hold private talks over the planned transaction today.
OTHER
Injuries soar in European football after winter World Cup
Injuries to European footballers became more severe after the winter World Cup in Qatar last year, contributing to a nearly 30% annual jump in the cost to clubs of seeing their players sit on the sidelines. According to a report by Howden Group Holdings Ltd., clubs in Europe's top five leagues suffered a €704.9m ($767m) hit from injuries last season, with the Premier League accounting for over 40% of the cost. The staging of the World Cup in a European winter led to players facing an extra eight days on the sidelines in the second half of the season. Manchester United, Nottingham Forest, and Chelsea were the most affected clubs in the English Premier League.


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