Category Archives: Financial sector

More than 5,000 investors now suing Hargreaves Lansdown

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Claims management company expects claims over collapsed Neil Woodford fund to exceed £200m

More than 5,000 people who invested in Neil Woodford’s collapsed equity fund are suing Hargreaves Lansdown, claiming that the investment platform was still promoting the fund even when it was aware of its problems.

The number of people suing Hargreaves Lansdown, the UK’s largest investment site, has almost doubled in the past two years, according to the claims management firm RGL Management. Two years ago the number of people taking part stood at 2,750.

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Reeves tells City regulator to encourage more risk-taking in financial sector

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New remit given to FCA by chancellor raises fears of a weakening of rules meant to avert another financial crisis

The financial regulator has been ordered to encourage more risk-taking across the City, raising concerns that the Labour government is in danger of watering down rules meant to avoid another financial crisis.

In an official “remit” letter addressed to Financial Conduct Authority (FCA) boss, Nikhil Rathi, the chancellor, Rachel Reeves, said regulations meant to protect consumers should not stand in the way of “sensible risk-taking” by investors and the wider financial sector, which includes banks, asset managers and insurers.

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City analysts overwhelmingly predict Bank of England interest rate cut

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Rare agreement among forecasters gives 96% chance of today’s MPC meeting cutting borrowing costs to 4.75%

The Bank of England policymakers are widely expected to cut borrowing costs for businesses and homeowners by reducing official interest rates from 5% to 4.75% when they meet later today.

Financial markets are overwhelmingly forecasting that the Bank’s nine-strong monetary policy committee (MPC) will reduce rates for a second time when it announces its latest decision at noon.

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Lloyds shareholders could take £1bn hit over car finance crisis

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Analysts forecast bank will have to halve £2bn buyback plan, as ex-boss of City regulator blames watchdog for crisis

Lloyds Banking Group could give almost £1bn less to shareholders this year as a result of the car finance crisis, analysts have said, as the City regulator’s former boss blamed the watchdog for the chaos.

The estimated size of a multibillion-pound compensation bill for motor lenders has grown after a shock court of appeal ruling last Friday, which said customers could not consent to motor loans that involved “secret commission” payments to brokers and car dealerships.

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London’s Aim shrinks to smallest since 2001 amid fears of tax relief changes

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UHY Hacker Young says 92 companies have delisted and only 10 floated on junior stock market in past year

The UK’s Alternative Investment Market (Aim) has shrunk to its smallest size in 23 years as business owners and investors anticipate an abolition of inheritance tax relief in the budget this week.

The accountancy group UHY Hacker Young calculated that 92 companies have delisted from Aim, London’s junior stock market, in the past year, reducing the total number of companies on Aim to 695.

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Quarter of UK summit investment came before Labour win, analysis suggests

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Ministers heralded ‘record-breaking’ £63bn total at London event but £16.5bn appears to have preceded July election

About a quarter of the investment announced by the government at its summit this week appears to have been secured or initiated before Labour came to power.

Ministers touted £63bn of investment at the summit on Monday, where they hosted hundreds of company bosses in a showcase of the UK’s pro-growth policies.

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Infrastructure taskforce to help chancellor avoid financial sector turmoil

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Rachel Reeves is to seek advice from City experts to ensure big projects’ value for money and reassure markets

Rachel Reeves, the chancellor, is taking action to ensure her budget plan for a multibillion-pound increase in government borrowing to fund infrastructure projects avoids a Liz Truss-style meltdown in financial markets.

Ahead of her tax and spending event on 30 October, the chancellor is convening on Friday the first meeting of a taskforce of leading City figures to advise on infrastructure projects. The government will also launch a watchdog to oversee public works and ensure value for money for the taxpayer.

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Will Rachel Reeves’s rules on debt and spending survive the budget?

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The chancellor desperately needs more money to finance growth and public spending so expect a bit of tweaking to supposedly strict constraints

Change*. If Labour’s one-word campaign slogan had an asterisk, it would have directed voters to Rachel Reeves’s budget.

Later this month the chancellor will attempt to walk the line between repairing Britain’s battered public realm, while sticking to a manifesto promise to balance the books without raising taxes on working people.

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Labour needs £25bn a year in tax rises to rebuild public services, warns IFS

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Thinktank says tax increases in budget will be necessary even if Rachel Reeves changes fiscal rules

Keir Starmer’s promise to end austerity and rebuild public services will require tax increases of £25bn a year in the coming budget even if debt rules are changed to provide scope for extra investment spending, a leading thinktank has said.

In its preview of the first Labour budget in 14 years, the Institute for Fiscal Studies said Rachel Reeves would need to raise taxes to fresh record levels to meet the government’s policy goals. The chancellor was also warned of the risk of a Liz Truss-style meltdown if the City responded badly to substantially higher borrowing.

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Rightmove rejects £6.2bn takeover offer by Murdoch-backed real estate firm

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FTSE 100 firm turns down fourth offer from the Australian property company REA Group

Rightmove has rejected a £6.2bn takeover offer from REA Group, the Australian real estate firm backed by Rupert Murdoch’s News Corp.

The UK property portal told the City on Monday morning that its board had turned down REA’s fourth offer, having concluded it was “unattractive and materially undervalues Rightmove”.

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Bank of England keeps interest rates unchanged at 5%

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Policymakers vote 8-1 against back-to-back cuts in borrowing costs after inflation stayed above Bank target

The Bank of England has kept interest rates unchanged at 5% as it put its efforts to ease the pressure on household budgets on hold.

The Bank’s monetary policy committee (MPC) voted by a majority of eight to one against launching a back-to-back reduction in borrowing costs amid concerns over lingering inflationary pressures.

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China gives PwC record £47m fine and six-month ban over Evergrande

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Accountancy firm accused of issuing false audits says it has sacked six partners and five other staff have left

The China arm of the accountancy firm PwC has been banned for six months and fined a record 441m yuan (£47m) over its audit of the collapsed property developer Evergrande, according to Chinese authorities.

Beijing’s ministry of finance imposed a six-month business suspension on PwC Zhong Tian, the accounting firm’s main division in mainland China, along with a 116m yuan penalty.

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Banks warned over denying sex workers business accounts

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FCA gives detailed guidance to lenders after hearing lack of access could lead to ‘significant harm’ for individuals

The City regulator has warned UK banks over denying accounts for sex workers, after hearing that a lack of access to business banking could lead to “significant harm” for individuals.

The Financial Conduct Authority (FCA) said that while banks said they were able to provide accounts for the adult entertainment industry in theory, they were often denying or shutting down business accounts in practice.

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PwC expecting six-month China ban over Evergrande audit

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Company tells clients it also expects to receive a large fine following property developer’s collapse

The auditor PwC China has reportedly told clients that it expects to receive a six-month ban from Chinese authorities, and potentially a large fine, as a punishment for its role in auditing the collapsed property developer Evergrande.

PwC expects to be banned from conducting regulated activities in China, such as signing off on financial results, for six months starting in September, the Financial Times reported.

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Investors push Glencore to scrap spin-off of heavily polluting coal division

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More than 95% of investors urged commodities firm to keep highly profitable fossil fuel arm to help maximise shareholder cash

Glencore has scrapped plans to spin off its coal business after shareholders urged the commodities company to hold on to the highly profitable but heavily polluting division.

The FTSE 100 company said that an overwhelming majority of its shareholders favoured retaining the coal business over its plan to list the division as a separate company on the New York stock exchange.

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Revolut finally receives UK banking licence after three-year wait

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Move paves way for fintech firm to hold customers’ deposits and offer own-branded loans, including mortgages

Revolut has secured a UK banking licence – with “restrictions” – more than three years after Britain’s most valuable fintech firm lodged its application with regulators.

It is a milestone for the company, though it may still be some time before it can hold its customers’ deposits.

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UK cannot afford to give ‘cold shoulder’ to China, says City minister

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Bim Afolami’s comments distance British government from protectionist moves by US

The UK cannot afford to give the “cold shoulder” to China, the City minister said on Monday, in comments that will distance the British government from the Biden administration’s protectionist crackdown.

Addressing financial services bosses at the City Week conference in London’s Guildhall, Bim Afolami said it was “crucial” to engage with strategic competitors such as Beijing, and that the UK risked losing control of its economic future if it failed to find common ground.

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‘Unfair banking’ and ‘damaging’ financial rules harming UK’s small firms, MPs warn

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Treasury committee says ‘debanking’ and use of personal guarantees for loans is putting small businesses at risk

Unfair banking practices and “damaging” financial regulators are harming small businesses and putting innovation and growth at risk, parliament’s Treasury committee has warned.

A report from the committee’s inquiry into access to finance for small and medium-sized enterprises (SMEs) said a lack of supportive policies were compounding problems for firms that had survived a “torrid” five years, which included the global pandemic and energy crisis.

“Confidence amongst SMEs in accessing finance has fallen and acceptance rates for business credit has lowered significantly,” the report said.

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Watchdog rejects request to investigate Tory MP over City lobbying complaint

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Parliamentary commissioner for standards says there was not sufficient evidence to justify opening investigation into John Baron

Parliament’s standards watchdog has turned down a request to investigate a senior Conservative MP over whether he used his role on the Commons Treasury committee to lobby for changes to City rules.

The parliamentary commissioner for standards, Daniel Greenberg, said a request submitted on behalf of campaign group Unlock Democracy had not provided any evidence that John Baron MP was not acting in the public interest, or breached any rule related to lobbying, that would be sufficient to justify opening an investigation.

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Dividends payments soar globally as worker pay stagnates

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Shareholder payouts grew 14 times faster than wages over past three years, says Oxfam report

Shareholders have proved to be more successful at securing bumper payouts than workers have at winning higher pay, according to two studies that show dividends outstripping wages by a considerable margin in recent years.

Oxfam said analysis of global data showed that dividend payments to shareholders over the last three years grew an average of 14 times faster than worker pay across 31 major economies.

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