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The Financial Conduct Authority (FCA) is investigating traders at an unnamed bank for engaging in market abuse around the Brexit vote. The financial watchdog is looking into whether three traders are guilty of spoofing – an activity that sees traders attempt to profit by placing orders on financial assets which they never intend to complete. The FCA said the traders were acting both individually and together. The alleged misconduct took place in the weeks before and after the vote to leave the EU in June 2016, with it not immediately clear if the activity had any direct link to Brexit-exposed assets. Details of the spoofing were released in a warning notice, which is usually published after an internal investigation but before a formal ruling by the FCA.

 

Daily Mail

Evening Standard

Ian Wright, head of the Food and Drink Federation, has warned that food shortages in supermarkets and restaurants are "permanent" and shoppers will never again enjoy a full choice of items. He claimed that staff shortages - triggered by a combination of Covid and Brexit - had killed off the "just-in-time" delivery model. Wright said: "The result of the labour shortages is that the just-in-time system that has sustained supermarkets, convenience stores and restaurants - so the food has arrived on shelf or in the kitchen, just when you need it - is no longer working." However, Prime Minister Boris Johnson’s spokesperson rejected the warning, saying: "We don't recognise those claims. We have got highly resilient food supply chains which have coped extremely well in the face of challenges and we believe that will remain the case."

 

The Independent

 

The Bank of England has warned that some banks and building societies are not supplying enough data to enable regulators to spot threats to the financial system, saying it was “disappointed to find significant deficiencies in a number of firms’ processes used to deliver accurate and reliable regulatory returns”. In a Dear CEO letter, the Bank said this created “an increased risk of material misstatements”. It added: “It was clear that multiple firms did not treat the preparation of their regulatory returns with the same care and diligence that they apply to financial reporting shared with the market and counterparties”.  The Bank has commissioned several official reports that will be paid for by the firms being scrutinised as part of a review of systems and controls on data reporting. This could see individual firms required to significantly boost investment in their processes, with the Bank saying those that continue to fall short face the threat of fines or being banned from regulated activity.

 

The Times

Financial Conduct Authority (FCA) chief executive Nikhil Rathi has defended the City regulator against criticism that its handling of the London Capital & Finance scandal has left the watchdog vulnerable to accusations of hypocrisy. He told the Treasury Select Committee that although the organisation was not subject to the senior managers regime, it had “adopted and applied the principles” of the regulations to its top bosses. This came after a report from the committee raised concerns that the LCF scandal suggested the FCA may have fallen short of the standards that it expected of the firms it supervises. In his response to the committee’s report, Mr Rathi noted the FCA’s decision to revoke bonuses for its top executives in response to issues with LCF. He said this was “consistent with our guidance on the senior managers regime.” The LCF scandal prompted severe criticism of the FCA, with the City watchdog’s handling of the matter the subject of an independent investigation conducted by retired judge Dame Elizabeth Gloster, who found that the regulator missed a series of warning signs about the company.

 

The Times

Grant Thornton is in advanced talks with the Financial Reporting Council (FRC) over a fine for its part in the collapse of café chain Patisserie Valerie. Sky News reports that a settlement could be finalised this month. A source says a fine of around £4m has been discussed, with it unclear whether any other sanctions would be imposed on Grant Thornton or any individuals. It is also as yet unclear whether Grant Thornton’s fine will be discounted due to the firm's co-operation with the audit regulator’s investigation. If the fine of approximately £4m is confirmed, it would be the FRC’s biggest ever financial penalty imposed on an accountancy firm outside the Big Four of Deloitte, EY, KPMG and PwC.  Patisserie Valerie’s parent company fell into administration in 2019, having reported "significant and potentially fraudulent accounting irregularities,” with the matter prompting a Serious Fraud Office investigation.

 

Sky News

The Sunday Telegraph

The Sunday Times

The Pensions Regulator (TPR) has reminded employers of their obligation to automatically enrol employees into workplace pensions, saying it will utilise its enforcement powers against those failing to sign staff up and pay their share of contributions into pensions. While the pandemic saw measures rolled out to ensure struggling businesses were not hit with fines, TPR is stepping up enforcement actions, with the watchdog using its powers in 77,032 cases in the first half of 2021 compared to 41,398 in the second half of 2020. Mel Charles, TPR’s director of automatic enrolment, said that the majority of firms “have done the right thing for their staff” despite the challenges presented by the coronavirus crisis.

 

Mail on Sunday

Inflation is expected to surge this week, with experts predicting the steepest annual increase in nearly three years. Economists surveyed by Bloomberg expected a year-on-year increase of 2.9% for August, with this coming after a slowdown to 2% recorded in July. The expected increase will stem in part from the VAT cut and Eat Out to Help Out scheme rolled out last year. Andrew Goodwin of Oxford Economics, who believes the projected rise in August is likely to be surpassed by further peaks later in the year, comments: “Obviously the comparison with that big fall in prices last August creates quite a substantial base effect … So almost all of the pick up between July and August will be due to that.” It is noted that the Bank of England expects inflation to hit around 4% in Q4, with price growth likely to stay strong through the early months of 2022. With data released last week showing GDP expanded just 0.1% in July, Capital Economics’ Paul Dales believes “stalling GDP and rising inflation will leave a whiff of stagflation in the air.” Mr Dales expects consumer price inflation to rise to 3.1%.

 

The Daily Telegraph

Tony Danker, director-general of the Confederation of British Industry (CBI), is warning that the National Insurance increase announced by the Prime Minister is a "self-defeating" tax raid that will put Britain's recovery from the pandemic at risk. Figures show that businesses paid £78bn in National Insurance in the year to March 2020, with the Telegraph’s Russell Lynch suggesting they “will shoulder the lion's share of next April's 1.25% rise.” Mr Danker, who warned that raising business taxes “too far has always been self-defeating as it stymies further investment,” said: “I am deeply worried the Government thinks that taxing business - perhaps more politically palatable - is without consequence to growth. It's not." Chris Sanger, head of tax policy at EY, comments that repeated tax increases would damage the UK's reputation as a low-tax economy. A Treasury spokeswoman said it has supported businesses during the pandemic and shown a commitment to supporting business investment, “extending the annual investment allowance increase for another year and introducing the superdeduction: the biggest two-year business tax cut in modern British history."

 

Financial Times

The Times

City A.M.

The Daily Telegraph

The Independent

Up to 660,000 jobs will be at risk if the UK continues to fall behind other countries when it comes to investment in green infrastructure and jobs, according to a report from the TUC. The study suggests 260,000 manufacturing jobs could be at risk as well as 407,000 in supply chains. Analysis shows that while the Treasury is expected to invest around £180 per person on a green recovery and jobs over the next decade, US President Joe Biden plans to allocate more than £2,960 per person on a green recovery. It has also been shown that relative to the population, the UK’s green recovery investment is just 24% that of France, 21% that of Canada, and 6% that of the US. The TUC has urged the Government to fund an £85bn green recovery package to create 1.24m green jobs. The union body also called on ministers to deliver a scheme to help protect working people through periods of profound industrial change. TUC general secretary Frances O’Grady warned that “the clock is ticking,” adding: “Unless the Government urgently scales up investment in green tech and industry, we risk losing hundreds of thousands of jobs to competitor nations. If we move quickly, we can still safeguard Britain’s industrial heartlands.”

 

The Observer

Unions have accused Morrisons of taking a “dangerous and retrograde step” after the supermarket reduced sick pay for unvaccinated staff in an effort to encourage jab uptake. The cut will not apply to those who have not been given the chance to get two vaccine doses or those who have COVID-19 symptoms. Rob Miguel, national health and safety adviser at Unite, said the policy risks being counter-productive. He said: “The pandemic has taught us that workers who can’t afford to self-isolate will be tempted to continue working, as the economic consequences of not doing so are dire.” He added: “Such strong-arm tactics will result in issues around equalities, human rights and ethical breaches.” Lawyers at Simmons & Simmons also said the company could also face discrimination claims over the move, in particular from those with disabilities who were medically able to get the vaccine, but had opted not to.

 

The Daily Telegraph

A US study has found that air quality inside an office can have a significant impact on workers' cognitive function, including their response times and ability to focus. "We have a huge body of research on the exposure to outdoor pollution, but we spend 90 percent of our time indoors," observed Jose Guillermo Cedeno Laurent, a research fellow at Harvard University and lead author of the paper published in Environmental Research Letters. He and his colleagues studied 302 office workers in six countries (China, India, Mexico, Thailand, the US and the UK) over a period of a year. Workspaces were fitted with an environmental sensor to monitor real time concentrations of fine particulate matter 2.5 micrometres and smaller, PM2.5, as well as carbon dioxide, temperature, and relative humidity. The study ended in March 2020 when the pandemic precipitated global lockdowns.

 

France 24

British businesses and consumers have paid 42% more in customs duties on goods since Brexit came into force, research from UHY Hacker Young suggests. The total hit a record £2.2bn between January 1st to July 31st, with the "rule of origin" tariff which applies to goods imported from the EU but originally made outside the bloc the main driver of the increase.

 

Daily Mirror

Monzo is reportedly planning to enter the buy now, pay later market, with a source familiar with the plan saying the digital bank is finalising plans for a service which will include affordability assessments - something rivals generally do not require. This comes just days after rival challenger bank Revolut announced it is launching its own product to rival sector pioneers ClearPay and Klarna. While most buy now, pay later providers are not regulated by the Financial Conduct Authority, Monzo's banking licence means it will have to carry out affordability checks on customers.

 

The Daily Telegraph

City AM

Daily Mail

Evening Standard