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Rob Lucas, chief executive of CVC Capital, has cautioned that tax increases on wealth could lead to a significant departure of financiers from London. He said: "The international finance world is an incredibly dynamic world. People are moving all the time," highlighting the potential impact of tax changes on the decisions of non-British partners and staff. The Chancellor is considering adjustments to capital gains taxes and a crackdown on carried interest, which is currently taxed between 18% and 28%. Despite these concerns, Lucas believes that changes to carried interest will not significantly affect CVC's operations. Fred Watt, CVC's chief financial officer, expressed confidence that the government will ensure the UK remains competitive in attracting investment.

 

The Daily Telegraph

The British Chambers of Commerce (BCC) has warned that the UK economy is set to grow at a slower pace, with gross domestic product (GDP) expected to decline to 0.4% in the third quarter and 0.2% in the final quarter of the year. Vicky Pryce, chair of the BCC Economic Advisory Council, said: "The BCC's latest forecast shows that while the UK economy will perform better this year, it's unlikely to be heading into the fast lane any time soon." Despite an upgrade in growth predictions for 2024 from 0.8% to 1.1%, challenges remain, including global economic uncertainty and a cautious government fiscal outlook. Employment growth has also slowed, with businesses reporting a 0.7% increase over the past year, the weakest in three years. The Bank of England noted that the labour market is loosening, which may lead to further interest rate cuts.

 

The Daily Telegraph

Businesses are anticipating a rise in inflation, with expectations set to reach 2.6% in a year, up from the current 2.2%. According to a Bank of England survey, inflation is projected to remain above the central bank's target of 2% for the next three years, at 2.7%. Rob Wood of Pantheon Macroeconomics stated: "We see enough signals to expect wages growth and inflation to linger above target consistent rates for longer than the MPC expects." Companies plan to reduce wage growth from 5.7% to 4.1% over the next year, while price increases are expected to drop from 3.7% to 3.4%. The Monetary Policy Committee is likely to proceed with caution, with financial markets anticipating more significant rate cuts than the Bank may implement. T Rowe Price noted that persistent inflation expectations will keep the Bank of England cautious in its approach.

 

City AM

The Times

In the first half of 2024, British corporate pension deals, known as bulk annuities, reached £20bn, reflecting a 5% decline from the previous year, according to Legal & General. The report highlights that UK insurers have been expanding their bulk annuity business as companies seek to offload defined benefit pension schemes. However, some pension scheme trustees are opting against purchasing bulk annuities due to higher interest rates leading to surpluses after years of deficits. Legal & General anticipates a full-year volume exceeding £40bn, down from last year's record of £49bn. The US market, in contrast, experienced a record first half with $26bn in deals, marking a 15% increase from the previous year.

 

Reuters

The Confederation of British Industry (CBI) has highlighted the urgent need for reforming the UK's business rates system, which it describes as a "competitiveness disaster." It said the current system is overly complex and unfair, discouraging investment and renovation, particularly in energy efficiency. Rain Newton-Smith, CBI's chief executive, said: "To get business investing for growth, the government must cut through this Gordian Knot." The CBI's report calls for a fairer, clearer, and more competitive tax system, including annual revaluations and a targeted green super-deduction to encourage private investment.

 

The Daily Telegraph

The Financial Conduct Authority (FCA) has significantly increased its enforcement actions, cancelling the authorisation of 1,261 firms in the year ending March, more than double the previous year's figure. This move is part of a broader strategy to enhance regulatory oversight and address concerns over compliance. In its annual report, the regulator also said is ha charged 21 individuals with financial crime offences - the highest number brought in a single year. “As we have shown this year, we are fully committed to both supporting and balancing the different needs of consumers, businesses, and the wider economy, enabling all to flourish,” Nikhil Rathi, chief executive of the FCA, said in a statement.

 

City AM

The Competition and Markets Authority (CMA) has confirmed a probe into the dynamic pricing of Oasis tickets on the Ticketmaster platform. The watchdog said it would look into whether the firm’s sale of tickets may have breached consumer protection law. “It’s clear that many people felt they had a bad experience and were surprised by the price of their tickets at check-out. We want to hear from fans who went through the process and may have encountered issues so that we can investigate whether existing consumer protection law has been breached,” said Sarah Cardell, the CMA’s chief executive. “The CMA also welcomes the government’s recent announcement that it will consult on measures to provide stronger protections to consumers in the ticketing sector, wherever they buy their tickets.”

 

City AM

The Financial Reporting Council (FRC) has reported that UK insurance companies are generally adhering to the new global accounting standards set by IFRS 17 Insurance Contracts, which were implemented in 2023 after two decades of development. The FRC reviewed the accounts of 17 firms and acknowledged that while compliance is satisfactory, there are areas needing enhancement, particularly in the use of estimates.

 

Bloomberg Law

Microsoft's chief diversity officer, Lindsay-Rae McIntyre, talks with the BBC about the importance of diversity in addressing bias in artificial intelligence (AI). Following a PR crisis in early 2023, where its Bing chatbot exhibited troubling behaviour, Microsoft has pivoted to focus on inclusivity in AI development. McIntyre stated: "It's never been more important as we think about building inclusive AI and inclusive tech for the future." The company aims to ensure diverse representation among its teams to create fair AI systems. Despite challenges, including inherent biases in training data, Microsoft believes that embedding diversity and inclusion (D&I) from the outset can lead to more equitable AI technologies.

 

BBC News

The UK has officially joined the EU and the United States in signing the first international treaty on artificial intelligence, aimed at safeguarding human rights, democracy, and the rule of law against potential AI threats. This legally binding treaty, developed by the Council of Europe, mandates countries to monitor AI development and ensure strict management of the technology. Shabana Mahmood, Lord Chancellor and Justice Secretary, said: “We must not let AI shape us – we must shape AI.” The treaty also requires nations to protect citizens' data and privacy, while addressing AI-specific risks.

 

The Independent UK

Proposals to enhance workers' rights may inadvertently create a “two-tier” job market, according to the Resolution Foundation. The think tank warns that making it harder for employers to dismiss staff could lead to an increase in temporary contracts, which may harm the very workers the reforms aim to protect. The think tank's report says: “Countries with stronger employment protection tend to see greater use of temporary workers. This suggests that if the UK is to significantly strengthen employment protection for regular workers, it might either have to accept greater use of temporary contracts, or consider limiting their use. The former scenario might end up looking much like today's labour market in terms of overall hiring and security, but it would arguably be less desirable, as there is evidence that in ‘two-tier' labour markets workers struggle to bridge the gap between insecure temporary jobs and secure permanent jobs, posing a threat to progression and social mobility.” Nye Cominetti, the economist behind the report, emphasised the need for reforms that do not deter firms from hiring. The study highlights that while Britain has a low unemployment rate of 4.2%, the potential shift towards temporary contracts could undermine job security for vulnerable workers.

 

Daily Telegraph

PwC has told its UK employees that it will start monitoring their office attendance as the firm toughens up its hybrid work policy. A memo sent to staff on Thursday by managing partner Laura Hinton also told staff and partners that they should spend at least three days a week in the office or with clients, up from two or three days previously. “We will start sharing your individual working location data with you on a monthly basis from January as we do with other data such as chargeable hours,” Hinton wrote in the memo. “This will help to ensure that the new policy is being fairly and consistently applied across our business.” She added: “We all benefit from the positive impact of a hybrid approach, but the previous guidance of at least two to three days a week was open to interpretation.”

 

Bloomberg

Financial Times

The Guardian

The Times

Thames Water bondholders are attempting to draw up a new funding solution in order to prevent the company falling into special administration if a crucial equity raise fails. The group of creditors, who hold £9bn of debt, are working with lawyers at Akin and bankers at Jefferies in parallel with Thames Water’s attempts to attract new equity investors. Meanwhile, Thames Water boss Chris Weston told Sky News he can save the debt-laden utility, adding that he supports the government’s efforts to ensure improved environmental performance at UK water companies. This comes as the Environment Secretary, Steve Reed, insisted that Labour had ruled out nationalising water companies but promised wider reforms following a comprehensive review.

 

Sky News

Bloomberg

Financial Times

The Daily Telegraph

The Times

The architecture firm found to bear a “very significant degree of responsibility” for the Grenfell tragedy has been prevented from being wound down because of the disaster. Studio E, which led the design of Grenfell’s refurbishment, has been in liquidation for more than four years. Legal experts say it may have been prevented from being dissolved because prosecution for corporate manslaughter is already underway.

 

The Times

A Russian court has frozen the shares of Raiffeisen Bank International's local arm, preventing any sale of the business. A spokesperson for Raiffeisen stated: "We can still appoint management and give instructions to the Russians but we cannot sell the bank." The European Central Bank is urging Raiffeisen to reduce its Russian business, which has become increasingly profitable since the onset of the Ukraine war, accounting for about half of the group's profits in early 2023.

 

Reuters

Tewkesbury Borough Council has reported significant disruptions to its services following a cyber attack on Wednesday afternoon. The council initiated "necessary cyber response steps" and began shutting down its systems to mitigate the impact. An investigation is currently underway, with council leaders collaborating with the National Cyber Security Centre and the counter-fraud agency. A spokesperson for the council said: "Many of our services are unavailable or slower than usual and our phone lines are expected to be very busy."

 

BBC News

Investor pressure on Nike is intensifying as Norway's sovereign wealth fund supports a resolution aimed at improving working conditions in garment factories. The resolution, backed by a coalition of investors including Domini Impact Equity Fund, highlights the industry's failure to address "persistent rights abuses such as wage theft." Nike, facing declining sales and criticism over its supply chain practices, has seen its ESG rating downgraded by MSCI. The resolution seeks to encourage Nike to establish binding agreements with workers in high-risk sourcing countries.

 

Reuters

John Lewis is set to reinstate its ‘never knowingly undersold’ price pledge, effective from Monday, after previously discontinuing it in 2022. The decision aims to enhance the retailer's value perception among customers. CEO Peter Ruis said: “Customers have recognised our quality but there were questions over whether our value offer has been sharp enough in some areas.” The updated pledge will leverage AI technology to match prices from 25 major competitors, including Amazon and M&S. Around 30,000 prices are expected to change.

 

The Daily Telegraph

The Times

The Guardian

The World Bank has approved a $68m programme aimed at preventing Pacific Island nations from losing access to the international financial system, which is crucial for tourism, trade, and aid. The funding will provide $9m each to eight Pacific Island countries to ensure cross-border transactions continue, especially as Nauru and the Marshall Islands face the exit of their last international banks. The initiative also aims to help these nations comply with international financial standards.

 

Reuters