The row has hit the share prices of both Unilever (LON:ULVR) and Tesco (LON:TSCO), dragging the FTSE down from last week’s highs. Unilever is currently down 3.96 percent at 3,576, with Tesco faring slightly better down 2.40 percent (1346GMT).
13/10/2016
Three quarters of small businesses in the UK are looking to expand within the next two years, showing a generally optimistic mood in the business sector post-Brexit.
73 percent of businesses with over five employees have plans to grow dramatically or moderately over the next two years, according to a new report by Albion Ventures. However half of the 1,000 SMEs surveyed said that finding skilled staff to fill positions is one of the biggest challenges, an issue that may grow worse post-Brexit. Businesses in the manufacturing, construction, medical and healthcare sectors are the most affected, relying on candidates with job-specific training to fill the roles.
On a sector basis, manufacturing companies remains the most bullish about growth and the most relaxed about Brexit. Small businesses are largely split on the impact of Brexit, with 36 percent unworried by the referendum result, and 41 percent expecting it to be a hindrance. However, this opinion varies greatly depending on demographic – those in London are the most concerned, and over half of businesses owned by Millenials expect Brexit to cause problems in the long run.
Patrick Reeve, Managing Partner at Albion Ventures, commented on the report: “Against a backdrop of profound change, one element that has remained reassuringly unchanged is the optimism underlying the UK’s small businesses. Firms are looking to grow their headcount and productivity is on the increase. The biggest barrier to growth, finding skilled staff, is generated by success rather than failure.
“The downside is that the economy is coming under capacity constraints at a time of considerable political uncertainty. While many of the pressures on growth we have seen in recent years have eased, the skills that enable us to compete are in short supply.”
12/10/2016
Brexit may have a detrimental effect upon future growth of the National Living Wage, according to a report by The Resolution Foundation.
The think-tank’s latest research indicates that leaving the European Union will detrimentally impact the anticipated growth of the national wage boundaries in coming years. The report stated that weak pay growth rates, as a result of such developments, would ultimately see around a 10p decrease in the projected figures for living wages. Specifically, the foundation’s report predicts that the National Living Wage in 2020 will hit around £8.20, less than previous estimations.
However, the report said the expected 10p-an-hour increase will still deliver annual rises of up to £600 for over 4 million workers in the U.K. In addition, it also calculated that subsequent increases in wages will help conditions for many, with around 800,000 individuals set to be out of low pay by 2020.
Conor D’Arcy, a policy analyst at The Resolution Foundation, said: “While there is much uncertainty over Britain’s long-term economic outlook, most economists agree that wage growth in the next few years is likely to be weaker than expected prior to the referendum.
“That means we’re unlikely to see the £9 national living wage that George Osborne talked about in this parliament. As we approach the autumn statement we’ll soon learn what the [national living wage] will be next year. An increase to around £7.50 will deliver a welcome annual pay rise of up to £600 for full-time staff.
“Though that’s less than the £800 raise previously forecast, it’s sensible that the size of the rise adjusts in line with wages of typical workers. This flexibility means that calls from some businesses to scale back the wage even further are wide of the mark.”
The National Living Wage initiative was introduced in April of 1999 by Tony Blair’s government, and has been steadily increasing since. The current rate was set in April 2016 and stands at £7.20, or £6.20 for under 25 year olds.
Previously, an increase in living wages for under 25’s was regarded as the centrepiece of the former Chancellor, George Obsorne’s economic budget targets that were set out earlier in 2015. However, this report raises serious questions about the viability of these targets in the post-Brexit economic climate.
Monarch have secured an £165 million investment from majority shareholder Greybull Capital, after concerns the airline would be unable to renew its ATOL membership.
The struggling budget airline had faced troubles earlier this year after rumours that they were unable to renew its membership of the Air Travel Organisers’ Licensing (Atol) scheme, which ensures costumers can receive refunds should a participating airline collapse.
Earlier this summer, Monarch had stated that more funding would be necessary, warning in its annual report that it needed to obtain around £35 million in funding from its majority owner Greybull Capital or alternatively, an external lender.
The airline had been participating in negotiation talks with its major stakeholder Greybull Capital and Boeing earlier in the week to secure the necessary financial assistance. The increased investment from Greybull Capital will allow Monarch to be in a position to comply with the Civil Aviation Authority’s (CAA) financial health check-list and ultimately renew its Atol membership.
Monarch were able to renew their license just hours before the CAA deadline earlier in September. The CAA had agreed to initially extend its license for 12 days until the 12th of October. The CAA has nonetheless said that it would “continue to monitor the company” in its “period of extension”.
This latest investment will ease the mounting pressure on Monarch and ensure that securing further CAA licensing will prove an easier feat.
12/10/2016
Elliott put the Pound’s downward spiral down to Theresa May’s ‘Hard Brexit’ strategy, in which single market membership may be sacrifice for immigration control, the UK’s oversize current account deficit and the possibility of lower interest rates.
The FTSE has benefitted heavily from sterling’s drop rising 0.5 percent on Tuesday to a record intraday high of 7,129.83 points.
The FTSE 100 is currently trading up 0.04 percent at 7,100.24 (1332GMT).
11/10/2016
11/10/2016
10/10/2016
Deutsche Bank (ETR:DBK) shares fell in early trade on Monday after reports that its CEO had failed to agree a deal with US Department of Justice to lower their $14 billion fine.
Chief executive John Cryan was in the US over the weekend for the autumn meetings of the International Monetary Fund and the World Bank, with many hoping he would agree a new figure for the bank’s fine with the US authorities whilst he was there. However, it has been reported that no new deal was made.
The bank was handed the fine back in September for its part in causing the 2008 financial crisis. It is the largest fine awarded so far, causing Deutsche Bank shares to drop dramatically since on worries that the bank will be unable to pay it.
The lender was the biggest faller on Germany’s main stock market in early trading but has since regained some ground, currently trading down 0.83 percent at 12.19 (1248GMT).
Michael Hewson, chief market analyst at CMC Markets, told the BBC: “Deutsche Bank hasn’t as yet been able to come to any agreement with the US Justice Department as it looks to overcome the hurdle of the prospect of a rather large fine. “Talks are continuing while the bank looks at potentially spinning off a stake in its asset management division in order to free up some extra capital.”
Snapchat’s parent company is considering listing the company on the stock market, in an Initial Public Offering valuing the app at $25 billion.
This would be the largest share sale on the US stock exchange since 2014, when Chinese company Alibaba was first listed at a value of $168 million.
The app has quickly come to dominate the social media world, having been used by various high-profile celebrities and companies alike. Snapchat reportedly has over 150 million users, with 10 billion videos being viewed daily on the App. The company is projected to generate $366.7m in global advertising revenue, according to data.
The app was founded by Evan Spiegel, Bobby Murphy and Reggie Brown in 2011, and has steadily gained popularity. CEO and founder Evan Spiegel, who is reportedly worth $2.1 billion, recently renamed the company ‘Snap’ to reflect the expanding components of the business.
Spiegel rejected a previous bid from social media giant Facebook earlier last year, with Facebook going on to acquire photo-sharing platform Instagram instead. Instagram have been since criticised for recent updates to the App which allowed users to post public videos, in a similar fashion to Snapchat.
The company is preparing to float in March 2017, according to a report released by the Wall Street Journal. The IPO valuation of $25 billion is a significant increase on the May funding evaluation of $17.8 billion, after which Snapchat attracted various new investors. Among these was Sequoia Capital, a venture capital firm which has invested in several other tech businesses including YouTube, Google, Oracle and Yahoo.
In September, Snap Inc introduced plans to expand the business through the launch of Spectacles. Spectacles, are pitched as glasses that are able to record ten second clips which can then be sent to smartphone devices via Bluetooth. The glasses are expected to be released prior to Christmas and retail for $130 (£100).
