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Four major UK banks, Lloyds, TSB, AIB, and HSBC, have failed to comply with banking rules, according to the Competition and Markets Authority (CMA). The banks provided incorrect information to customers about their products and services. HSBC listed closed branches as still being open. The CMA has issued directions to HSBC and public letters to HSBC, Lloyds TSB, and AIB. The banks are required to follow certain rules when informing customers, including displaying correct interest rates and accurate branch locations. The CMA has taken formal enforcement measures to ensure compliance and has issued refunds to customers. "It's disappointing that seven years on, we have to put in place formal enforcement measures to secure better compliance from a major bank like HSBC which, yet again, is in breach of the rules," said Dan Turnbull, CMA senior director.

 

Financial Times

The Daily Telegraph

The Chancellor is expected to reveal a £20bn hole in government spending for essential public services on Monday. Critics say the review is being used to justify significant extra tax hikes. But Labour sources blame the Conservative government for a "shocking inheritance" and accuse it of "presiding over a black hole and still campaigning for tax cuts." Reeves is expected to announce tax changes in the budget in October, although Labour has ruled out changes to income tax, VAT, national insurance, and corporation tax. Tax-raising options on offer include limiting inheritance tax relief and removing the capital gains uplift on inherited assets. Speaking on the sidelines of the G20 meetings in Brazil, Reeves said: “We’ve inherited a mess. I am going to fix the mess. I will never make unfunded commitments. I will never make promises without saying where money is going to come from.”

 

Financial Times

The Daily Telegraph

The Guardian

The UK economy has been growing at a much faster rate than expected, surprising economists. In the first quarter, the economy grew by 0.7%, making it the fastest growing economy in the G7. Economists predict that this strong growth could continue in the second quarter. The UK's output gap, which measures how far output is from its potential, was underestimated, leading to stronger growth this year. Additionally, consumers have been benefiting from inflation being back at 2% and strong wage growth, resulting in increased disposable income. The savings ratio has also increased, indicating that households are saving more. With inflation under control, the Bank of England is likely to cut interest rates, further supporting economic growth. Money markets now suggest there's more than a 50% chance the BoE will cut rates next week, and a 92% chance it will happen by September.

 

Daily Express

The Daily Telegraph

Financial institutions tapped the Bank of England’s short-term repo (STR) facility for over £30bn this week, up from £700m at the start of the year. As the BoE shrinks its balance sheet after years of expansionary programs, banks are increasingly reliant on repos for funding, although executive director for markets Vicky Saporta says she’d like to see more borrowing from the six-month indexed long-term repo facility, which allows banks to pledge illiquid assets in return for reserves, as opposed to the gilts pledged for repos.

 

Bloomberg

Late payments hit a post-pandemic high in June with retail and hospitality businesses being the worst affected. Analysis by accountancy firm Xero showed that payments were made on average 7.3 days late between April and June, an increase of 1.8 days compared with the previous quarter and the largest increase in four years. Kate Hayward, Xero’s chief in the UK, said: “To wait over a week for payment owed is an unacceptable and unsustainable financial model for small businesses.”

 

The Times

Crypto company CB Payments Limited (CBPL) has been fined £3.5m by the Financial Conduct Authority (FCA) for significant weaknesses and gaps in its financial crime control network. CBPL, part of the Coinbase Group, onboarded and provided crypto services to over 13,000 high-risk customers, allowing them to make almost 13,000 deposits worth about £19.4m and multiple crypto transactions totalling about £175m. The breaches went undetected for almost two years. The FCA stated that CBPL's controls had significant weaknesses and repeatedly breached requirements, increasing the risk of money laundering. CBPL agreed to resolve the matter and received a 30% discount on its fine.

 

City AM

The Daily Telegraph

The Times

The Prudential Regulation Authority has authorised a banking licence for Revolut, allowing the UK fintech to provide overdrafts, loans and savings products to its more than 9m UK customers. The London-based company first applied for the licence in early 2021 but the application ran into multiple problems. This is “a significant step forward for Revolut” and its customers, UK CEO Francesca Carlesi said in a statement. Revolut was last valued at $33bn in a 2021 fundraising round, but is in talks to sell about $500m worth of shares in a deal that would value it at about $40bn.

 

Bloomberg

Financial Times

The Times

The Financial Reporting Council (FRC) has published its sixth Annual Enforcement Review, providing a summary of FRC enforcement activity for the year ending 31 March 2024. As normal, the review reports on case activity and numbers, timeliness – with both key performance indicators achieved this year against minimal headcount growth – and sanctions imposed. The total figure for sanctions for audit firms and partners before discounts for co-operation was £48.2m in 2023-24, significantly up on £40.5m in 2022-23. Even after discounts the fines totalled £33.1m, although this figure was less than the £34.6m of sanctions meted out in 2021-22.

 

International Accounting Bulletin

The Times

A North Korea-backed cyber group has been accused of carrying out an online espionage campaign to steal military and nuclear secrets. The UK, US and South Korea issued the high-profile warning about the group - known by the names Andariel and Onyx Sleet – alleging it is targeting defence, aerospace, nuclear and engineering entities to obtain classified information, with the aim of advancing Pyongyang’s military and nuclear programs and ambitions. Paul Chichester, director of operations for the UK’s National Cyber Security Centre (NCSC), an arm of GCHQ, said: "The global cyber espionage operation that we have exposed today shows the lengths that DPRK state-sponsored actors are willing to go to pursue their military and nuclear programmes. It should remind critical infrastructure operators of the importance of protecting the sensitive information and intellectual property they hold on their systems to prevent theft and misuse."

 

Sky News

BBC News

Almost two-thirds of British jobs could be "enhanced" with AI, according to research commissioned by Google. The study found that 61% of jobs in the UK will be "radically" transformed by AI, while 31% will be "insulated" from the technology. The report also said that only a small number of jobs are likely to be fully phased out by AI, with the financial and insurance sector forecast to lose just 4% of jobs. Google is partnering with various organisations to introduce AI technology into workplaces in a way that boosts workers' abilities. The government supports this trial, which aims to deliver AI skills training to help careers flourish and businesses grow. Public First estimates that the UK economy could gain over £400bn if AI is adopted to its fullest extent over the next six years.

 

The Guardian

Anglo American has announced a £1.2bn writedown on its troubled Woodsmith fertiliser mine in North Yorkshire. This comes after the mine had already taken a £1.3bn hit from a writedown last year. The company is currently undergoing an 18-month survival plan, which includes selling off major parts of the business and focusing on copper, iron ore, and fertiliser production. The Woodsmith project, which aims to produce polyhalite fertiliser, has faced setbacks and doubts about its future. However, CEO Duncan Wanblad remains hopeful that the project can still begin production by the end of the decade with strengthened finances and further investment. Anglo American reported an 8% fall in first-half revenues to £11.3bn.

 

The Times

The Guardian

Evri, the parcels delivery group formerly known as Hermes UK, has been sold by its private equity owner, Advent International, to Apollo Global Management for £2.7bn. The sale attracted interest from JD.com, InPost, and Cainiao. Alex van Hoek, a private equity partner at Apollo, praised Evri's position in the sector and its customer base of over 12m. The deal comes amid a spate of dealmaking in the logistics industry, with Yodel and International Distribution Services also being sold. Martijn de Lange, the CEO of Evri, thanked Advent for their partnership.

 

The Times

Cineworld is set to announce a major restructuring plan that will result in the closure of around 25 cinemas across the UK, leading to hundreds of job losses. The cinema operator, which filed for bankruptcy in the US in 2022, is expected to reveal details of the overhaul today. Reports suggest that half a dozen cinemas will begin winding down immediately, with the rest closing by late summer. The planned closures will reduce Cineworld's British footprint by at least a quarter. The company is in talks with commercial landlords Landsec and Legal & General about the restructuring plan, including negotiations for rent reductions at 50 additional cinemas.

 

City AM

The chief executive of Southern Water, Lawrence Gosden, has admitted that the company's £90m fine for dumping raw sewage in the sea was a consequence of inadequate investment. Gosden stated that the company had not invested enough in the capacity of its sewage works, leading to overflows and the release of sewage when it shouldn't have occurred. Since the fine was imposed, Southern Water has been working on building extra capacity into its systems and installing monitors in pipes to locate blockages. Gosden pointed out that the turnaround plan is being funded by shareholders and that there has been no return to shareholders since 2017.

 

BBC News

De La Rue is hoping for a successful conclusion in talks over the sale of its currency and authentication business divisions. The banknote printer has received interest in both divisions and negotiations are progressing. However, the company has also revealed doubts over its ability to continue as a going concern due to a loan payment due in July next year. De La Rue's annual losses have narrowed to £15.3m, but its currency revenue fell by 18.7%. The company's revenue for the year dropped to £310.3m. Discussions over the sale of the business divisions are expected to conclude in the coming months. De La Rue's authentication division has exceeded its revenue target, growing by 12.5%.

 

The Daily Telegraph

The Independent UK

The Times

The owner of some of Britain's biggest shopping centres, Hammerson, suffered a £500m loss from the sale of Bicester Village. However, there are signs that rents and valuations of shopping centres have finally hit the bottom. Hammerson's net asset value fell to 38p from 51p at the start of this year. The loss resulted from the sale of a 40% stake in Value Retail, the company that owns Bicester Village, to a LVMH-backed fund. Hammerson's malls in Britain and France saw a rise in valuations, but its shopping centres in Dublin experienced a dip. The company is seeing a positive reversion in lease renewals, indicating that it could potentially earn more money in the future.

 

City AM

The Times

More than 150 former employees of Axiom Ince have successfully claimed that they were unlawfully dismissed without consultation or written notice. A tribunal ruled that the law firm failed to comply with its obligations under the Trade Union Labour Relations (Consolidation) Act 1992. The claimants will now receive a protective award of 90 days' gross pay, paid from the National Insurance Fund. The total claim is estimated to be worth £1.9m. Alan Lewis, employment partner at Pearson Solicitors, represented the claimants and stated that this outcome highlights the importance of appropriate consultation procedures in cases of widescale redundancies. Axiom Ince had acquired Ince & Co and Plexus Legal before its closure, resulting in over 350 redundancies.

 

Law Gazette

The Times reports on allegations that six bank managers from Munich were involved in a tax evasion scheme worth up to €16m. They allegedly spent 14 years driving to a dilapidated barn in the Ebersberger forest, where they had a sparsely furnished room with no amenities. The shed, known as the Seegrasstadl, was registered as the corporate headquarters of several subsidiaries of HypoVereinsbank (HVB) group, owned by UniCredit. The purpose was to take advantage of lower business rates in the district. The accused worked in HVB's "wealth cap" division, investing clients' funds in passenger jets. Germany has several mini tax havens that offer discounts on municipal trade tax rates, which critics argue can be exploited by professionals to set up sham companies.

 

The Times

A discount voucher which appeared in Sainsbury's app on Monday allowed customers to get all their shopping for free. News of the faulty voucher quickly spread online, prompting some customers to load up before the voucher was removed. A Sainsbury’s spokesperson said: “We have seen an increase in fraudulent coupons in our stores and we have processes in place to detect and block them. We also have in-store detectives monitoring for fraudulent attempts and we are working closely with the police on this issue."

 

Daily Mail

Metro