Nationwide hit by Budget banking tax

Miranda Wadham
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Nationwide hit by Budget banking tax

Nationwide has estimated that a new banking tax introduced in the July Budget may cost it £300 million, affecting their ability to lend.

Nationwide is Britain’s second biggest provider of home loans, providing more than a quarter of total net lending to the British housing market of the past year. The building society have announced that the changes could could the equivalent of £10 billion worth of consumer lending.

Chief Executive Graham Beale argues that the budget should have recognised the difference between building societies and banks. He said:

“This represents a missed opportunity to support diversity by acknowledging that building societies are different to banks and to recognise the contribution Nationwide and other mutuals make by lending to the UK economy, and the housing market in particular.”

Nationwide reported a 52 percent increase in first-quarter underlying profit to £400 million.

UK inflation turns positive

Miranda Wadham
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UK inflation turns positive
Consumer Price inflation has risen to 0.1 percent in July, up from 0 percent in June. The Consumer Price Index has remained flat for the last coupe of months, having turned negative in April for the first time since 1960. The Retail Prices Index measure of inflation was unchanged at 1 percent. “The slight (annual) increase is mainly due to clothing, with smaller price reductions in this year’s summer sales compared with a year ago,” said ONS statistician Richard Campbell told Reuters. An underlying measure of inflation, which strips out increases in energy, food, alcohol and tobacco, rose to 1.2 percent in July, up from from 0.8 percent in June. The pound is surging on the news, up 0.55 percent on the US dollar and 0.56 percent on the euro.

Morrisons to sell off local stores

Miranda Wadham
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Morrisons to sell off local stores
Morrisons (LON:MRW) is in talks to sell its convenience store branch of the company to the same investment firm that rescued Monarch Airlines, Greybull Capital. The deal was first reported in The Telegraph yesterday. Chairman Andy Higginson admitted that more than 30% of its convenience stores had not worked, and confirmed plans earlier this year to close more than 20 M local stores. Greybull Capital took over Monarch last year, investing £125 million into the company and setting it track to make a profit. The takeover of Morrisons local stores is rumoured to be worth tens of millions. In February, David Potts took over as chief executive of the struggling chain, and has since turned the company around, making it one of the best performing supermarkets over the 2014 Christmas season. The sell-off of M local stores is the next in a series of structural changes he has made to the company. Morrisons is currently trading down 0.88 percent, at 176.24 pence per share.

Liberty Interactive to acquire clothing site Zulily

Miranda Wadham
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Liberty Interactive to acquire clothing site Zulily
Liberty Interactive Corp (NASDQ:QVCA) has announced its intention to acquire Zulily Inc (NASDAQ:ZU), in a deal valued at $2.4 billion. Liberty Interactive hopes to take advantage of the online retailer’s younger clientele and its strong online presence. Zulily, the women’s clothing website, counts Chinese giant e-commerce Alibaba as one of its shareholders. Liberty will be buying Zulily for $18.75 per share, or $9.375 in cash and 0.3098 newly issued share of Liberty Interactive for each Zulily share. Zulily is trading up 45 percent on the news, with Liberty Interactive down 2 percent.

Government to sell stake in King’s Cross development

Miranda Wadham
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Government to sell stake in King’s Cross development
The government have announced plans to sell their 36.5 percent stake in the King’s Cross redevelopment, in order to boost their finances. The 67-acre King’s Cross Central Limited Partnership site is currently being turned into offices and residential properties and is Europe’s biggest city centre development. The sale is rumoured to be worth £500 million. In a statement, Transport Minister Robert Goodwill said: “By selling the government’s shares in King’s Cross Central we are selling an asset we no longer need to keep and realising its value for the taxpayer. The sale will help reduce the deficit.” The chancellor announced in his July budget that the government would be raising £3 billion through cutting their assets. The sale is being managed by estate agent Savills and investment bank Lazard. Prospective investors have until September to register their interest.

FTSE CEOs earn 183x the average salary

Miranda Wadham
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FTSE CEOs earn 183x the average salary
The chief executives of FTSE 100 companies were paid almost 183 times more than the average U.K. worker last year, according to figures released today. Data from the High Pay Centre says that the average FTSE 100 CEO earned around £4.96 million in 2014, in comparison to the £27,195 earned by the average full-time employee. The High Pay Centre is a think tank set up to look at the widening income disparity at British companies. They highlighted the fact that the gap is much bigger than in 2010, when CEOs earned 160 times more than the average worker. Deborah Hargreaves, the director of the High Pay Centre, said in a statement that: “Pay packages of this size go far beyond what is sensible or necessary to reward and inspire top executives. It’s more likely that corporate governance structures in the U.K. are riddled with glaring weaknesses and conflicts of interest.” Last year, investors at both Burberry and WPP urged FTSE CEOs to reduce the size of their pay packets. However, the High Pay Centre report noted that the average shareholder vote against pay awards across the FTSE-100 was just 6.4 percent.

Oliver’s Kitchen crowdfunds for tasty toffee puddings

Miranda Wadham
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Oliver’s Kitchen crowdfunds for tasty toffee puddings
With the end of August in sight, autumn seems to be coming on alarmingly fast. Leaves are turning brown and Selfridges have already put up their Christmas window display; before we know it, Christmas songs will be on the radio and it’ll be time to start thinking about all that Christmas food. However, the end of summer isn’t all bad – autumn brings back roast dinners and traditional, delicious puddings. One pudding in particular that is worth a try is the Orange and Cointreau Sticky Toffee Pudding, handmade by chefs in Oliver’s Kitchen. The company is currently crowdfunding on Kickstarter in order to expand and publicise their small pudding business. Oliver’s Kitchen, owned by Oliver Barton, 25 creates bespoke recipes and adds delicious twists to the nations favourite puddings. Their Orange and Cointreau Sticky Toffee Pudding has already won two Great Taste awards – almost unheard of for a small business. Great Taste is widely acknowledged as the most respected food accreditation scheme for artisan and speciality food producers. In the words of highly regarded restaurant and food critic Charles Campion, “Great Taste is the only food award worth having. Oliver Barton, owner of Oliver’s Kitchen, says that: “Being awarded the Great Taste Award two years running is a testament on the time and effort that goes into making our puddings. Oliver’s Kitchen creates artisan products and each pudding is homemade using freshly and locally sourced ingredients. It is great that this is recognised and is reflected in the taste.” The target is set at £5000.00 which will help increase production, expand premises and add more recipes and puddings to the production line. The vital funding will help Oliver’s Kitchen maintain their humble beginnings and continue to produce their artisan homemade products, but distribute it to a wider audience. The money will also be necessary to see the company through a seven week production period before gaining SALSA accreditation, meaning they will be able to expand and sell to larger companies. The campaign end this Saturday. For more information, visit the Oliver’s Kitchen website, or view their Kickstarter campaign.

Japan’s economy shrinks further

Miranda Wadham
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Japan’s economy shrinks further
Japan’s economy shrank at an annualised pace of 1.6 percent in April-June, according to figures released today. Exports slumped and consumers cut back spending, fuelling concerns that the Japanese economy is at a standstill and heightening pressure on policy-makers to stimulate the economy further. Prime Minister Shinzō Abe has implemented his own economic policy since gaining power in December 2012, so called ‘Abenomics’. His policy has been based on the “three arrows” of fiscal stimulus, monetary easing and structural reforms, but recent figures show further stimulation may be needed. Private consumption fell for the first time since June last year by 0.8 percent, down from the previous quarter. Overseas demand knowcked 0.3 percentage points off growth as exports to Asia and the US dropped. The Japanese economy has had a difficult year; in the last quarter of 2014, GDP contracted at an annual rate of 6.8 percent in the second quarter of 2014 – the worst since the earthquake and tsunami disaster hit Japan.

Airbus up on Indian deal

Miranda Wadham
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Airbus up on Indian deal

Airbus (EPA:AIR) has signed an agreement with Indian budget airline IndiGo for 250 A320neo aircraft, in a deal worth around $26 billion.

The deal is Airbus’ single largest order by value to date. IndiGo is the country’s biggest domestic airline by market share.

Airbus are up 1.38% this morning on the news. Shares in the company have risen over the past six months after a string of lucrative deals, including one with China for 45 new planes reportedly worth $11 billion.

FTSE 100 down, led by miners

Miranda Wadham
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FTSE 100 down, led by miners
Recent events in China have played on the FTSE 100, which opened 0.4 percent lower this morning after falling 2.5 percent last week. Fears of falling demand for oil has led to concerns about oversupply, with Brent crude losing another 1.2 percent to $48.58 a barrel. BHP Billiton (LON:BLP) is down 1.04 percent after being downgraded by Deutsche Bank, and Glencore (LON:GLEN), which has struggled in recent weeks, has lost another 1.9p ahead of this week’s results. However, building materials supplier Wolseley (LON:WOS) is up 1.3 percent after Citigroup raised its recommendation from neutral to buy.
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