The Financial Conduct Authority (FCA) released details of its redress scheme for victims of the British Steel Pension Scheme transfer misselling today.

A review by the FCA uncovered that 46% of recommended transfer advice provided to members of the British Steel Pension Scheme were unsuitable, with 41% declared suitable and 14% deemed unclear due to a “material information gap.”

The organisation is currently reviewing proposals for the best approach to carry out its redress scheme by next year.

The FCA said an estimated 1,400 pension scheme members will receive £71.2 million in compensation for the botched transfers, with redress scheduled to commence in early 2023 and the first payments distributed in late 2023.

The Work and Pensions select committee detailed the unscrupulous actions committed by the British Steel pension scheme’s financial advisors, and noted that members of the scheme were “exploited for cynical personal gain by dubious financial advisers in tandem with parasitical so-called ‘introducers'”.

The committee accused the FCA of stepping in too late to help members of the pension scheme and said the organisation should have been prepared to intervene when they initially received information about the poorly advised transfers in April 2017 but refused to take action until November 2017.

Analysts highlighted that the poor impact of the scandal will inevitably colour public opinion of the industry as a whole.

“While the vast majority of advisers in the UK provide a hugely valuable service to their clients, the few bad apples involved here have sadly tarnished the reputation of the entire sector,” said AJ Bell head of retirement policy Tom Selby.

“Aside from the direct impact on members who were badly advised, the scandal will also inevitably harm trust in retirement saving more generally.”

“Sadly, scandals such as Robert Maxwell at the Daily Mirror, Equitable Life and now British Steel tend to live long in the memory.”

Online ticketing platform Trainline shares gained 24% to 245p on Thursday afternoon after the company announced amendments to its third-party retail licence agreement.

Trainline and Rail Delivery Group (RDG) have reached an agreement on a memorandum of understanding (MOU) to alter its third-party retail licence as a result of RDG’s examination into rail retailing in the UK.

Trainline and other third-party sellers will now work with the RDG on new contractual licensing agreements in a cooperative manner. If new contractual terms cannot be mutually agreed upon, RDG has the power to establish a legally binding minimum set of business terms under the rules of the MOU.

Trainline’s commission rate would be reduced by 0.25%, according to the company, starting April 1, 2025, followed by basic terms which would apply to Trainline.

The base B2C online sales commission rate has been reduced by 0.5%, from 5% to 4.5% and the elimination of central industrial costs as a counterbalance which is estimated to be around 0.25% by Trainline.

AJ Bell investments director Russ Mould said, “There will be a sigh of relief in Trainline’s camp regarding the proposed changes to its commission rates. The rail industry is undergoing a lot of changes, and this includes reviewing the cut that third party ticket sellers get when they put bums on seats.”

“The rail sector has been through very difficult times during Covid, and it would have been easy to slash commission rates to the bone, leaving Trainline in a pickle.”

“Fortunately, the business should be able to cope with a half a percentage point decrease in the rate. Even better for its finances is the removal of central industry costs worth 0.25%. That explains why its share price has shot up more than 20% on the news.”

OPEC+ announced its decision today to increase its monthly oil output by a modest amount in line with its previous agreement, boosting its production by an additional 430,000 barrels per day (bpd) from May 2022.

The coalition resisted calls to increase its output past its current level of 11.7 million bpd to make up for the lack of Russian oil supply since the state’s invasion of Ukraine on 24 February.

“The consensus on the outlook pointed to a well-balanced market,” OPEC said in a tweet. “Current volatility is not caused by fundamentals, but by ongoing geopolitical developments.”

The global supply has currently seen a disruption of an estimated five to six million bpd, which amounts to approximately 5-6% of the international demand for the commodity.

“Saudi Arabia will be keen to avoid falling out with Russia by adding extra barrels at a time when Russian production is struggling,” said Callum Macpherson at Investec via Reuters.

The organisation also suspended its use of International Energy Agency data in favour of reports from consultancies Rystad Energy and Wood Mackenzie, following disagreements within the group over the IEA’s data.

UAE Energy Minister Suhail al-Mazrouei criticised the Agency for allegedly being unrealistic in its recommendations, following the IEA’s statement that no new oil and gas projects receive the green light past 2021.

In contrast, Rystad Energy’s stance argued that hundreds of new oilfields would soon be required to handle the level of fossil fuel demand.

The news follows President Biden’s announcement that the US is currently considering tapping into its 180 million barrel Strategic Petroleum Reserve in a bid to replace a level of the global oil supply lost over Russian sanctions.

The White House confirmed that President Biden will be making an official statement on his decision at 17:30 GMT tonight.

London’s small and mid cap markets traded slightly weaker on Thursday following the release of UK GDP figures and the prospect of the US releasing oil reserves hit energy prices.

Brewin Dolphin’s takeover by RBC made the wealth management company the FTSE 250 top riser with a gain of some 60%.

FTSE 250 Risers

Brewin Dolphin shares soared 61% to 512p as the Royal Bank of Canda agreed to buy the investment advice company for £1.6bn.

Rathbone Brothers gained 11% to 1,968p as a positive read across from the RBC acquistion of Brewin.

Trainline shares bounced back from its slump yesterday with gains of 21% to 240p as the travel ticketing company proposed changes to its commission rates.

“The rail industry is undergoing a lot of changes, and this includes reviewing the cut that third party ticket sellers get when they put bums on seats,” said Russ Mould, Investment Director, AJ Bell.

Dietary fibre business, Tate & Lyle announced the acquistion of Chinese company Quantum for $237m sending it shares to rise 2.7% to 739p.

Provident Financial shares increased 2.6% to 325 as the company swung to profit in 2021. The company saw pre-tax profit of £4.1 compared to a loss of £113.5m, despite a 13% fall in revenue.

A decrease in impairment charges from £312m to £50m helped Provident return to profits in 2021. The company also proposed a 12p dividend for 2021 compared to nil in 2020.

Safestore rose 0.9% to 1,347 as the company decided to purchase the remaining 80% ownership in Benelux, a joint venture with Carlyle Europe Realty.

HICL shares gained 0.3% to 177p announced the disposal of its entire interest in the Queen Alexandra Hospital PFI project to InfraRed European Infrastructure Income Fund for £108m.

FTSE 250 Fallers

Tullow oil shares dropped 3% to 51.6p as oil prices dipped with possibility of Biden administration releasing 180m barrels of oil from the SPR to curb fuel prices.

Retail stocks take the hit as retail spending is at lowest of all time, with Frasers, Pets at Home, WHSmith, M&S, Moonpig and Currys down 2.9%, 1.9%, 0.7%, 0.6%, 0.18% and 0.16% respectively.

However, Vivo Energy and Dunelm Group shares increased 0.22% and 0.27% respectively.

AIM Risers

Mirriad Advertising shares flew 24% to 21.5p when the company announced launch of The Lost Audiences – Regaining Control which highlighted the growth avenue for brands and advertisers to expand their reach via in-content advertising and to engage audiences in an impactful and non-disruptive way.

Renalytix gained 24% to 335p as the company completed a $30m financing package.

AIM Fallers

Xeros Technology shares sank 31% to 61p as the company no longer expects to reach month-on-month EBITDA profitability and breakeven in the first quarter of 2023 due to China restarting lockdowns and India’s slow return to normal operations because of the third wave of the pandemic.

Diamond producer, BlueRock Diamonds fell nearly 30% to 37.5p when the firm raised £2.1m by placing 6m shares at a 35% discount to fund its upgraded mining plans and pay its contractors.

Aukett Swanke shares lost 20% to 1.55p after the company reported a 22% decerase to £8m from £11m in revenues excluding sub consultant costs due to uncertainty in decision making and inevitable delays because of the pandemic.

Business in continental Europe made a profit of £330k exclusding group management charges, however the UK and Middle East business made losses for Aukett.

Kore Potash shares plummeted 15% as the company continues to make losses in 2021, with a pre-tax loss of $2m as opposed to $1m in 2020.

Oil prices fell 5% to $107 a barrel, finally dropping from the $110 mark after the Biden administration took steps to control fuel costs by considering a release of 180m barrels of oil from their Strategic Petroleum Reserve.

As part of its effort to decrease fuel prices, the Biden administration is reportedly considering a release of up to 180m barrels of oil from the Strategic Petroleum Reserve (SPR) over the next several months.

The Biden administration confirmed that this will be ‘largest-ever release’ since 1974, dating back to when the reserve was created.

For months, global energy supplies have been tightening as economies began to reopen and pandemic lockdown measures were loosened.

However, the global energy markets have been shaken with oil bans and sanctions imposed on Russia for invading Ukraine, as Russia is the second largest global oil exporter after Saudi Arabia.

Oil bans have led to rising fuel prices across the globe and have become a major political issue in the US as mid-term elections approach in November.

Biden discussed the potential to supply oil to the EU earlier this month, as EU leaders became wary of their economic progress due to high dependence on Russian oil.

The US is the largest oil producer in the world and currently produces 11.7m barrels per day, which is insufficient to meet global demand.

The possible oil release comes ahead of a meeting on Thursday between the Organization of Petroleum Exporting Countries and its allies, including Russia, known as OPEC+, an oil production group.

The US, the UK, and others have already pressed OPEC+ to increase its output, however OPEC+ currently appears unlikely to deviate from its strategy to steadily increase output. Most major energy-producing countries are either at capacity or unwilling to expand output.

Meanwhile, an emergency meeting of the International Energy Agency (IEA) has been scheduled for Friday.

It’s uncertain whether other IEA members, including the United Kingdom, France, Germany, and Japan, will follow the US in releasing oil reserves.

Russ Mould, Investment Director, AJ Bell commented, “You can understand why the US leader felt he had to do something, given the political heat he is getting for rising fuel prices, however a speculated release of one million barrels of oil per day over the coming months has to be seen in the context of total global output of around 100 million barrels per day.”

“Really this is tinkering at the margins. What might put more of a brake on prices is action by OPEC at its meeting later but the extent to which it could increase production, even if it wanted to, is open to question.”

The UK economy grew faster than expected with GDP growth of 1.3% in the last quarter of 2021 compared to the third quarter, as the health sector saw a boom in business with the arrival of the Omicron variant.

The Office for National Statistics estimated the GDP growth for Q4 2021 to be approximately 1%.

The 1.3% rise in GDP was a step in the right direction for the economy against the 0.9% GDP Growth in Q3 of 2021.

However, compared to Q2 2021’s GDP growth of 5.6% on the back of the economy’s rebound from the pandemic and its restrictions, the Q4 GDP rise is still optimistic.

Increased trips to the clinic at the start of Q4, a significant rise in coronavirus testing and tracing and the continuation of the vaccination programme were the primary drivers of growth in the health and social work.

According to the ONS, the household saving ratio reduced to 6.8% in Q4 compared to 7.5% in Q3 2021. Rising customer expenditure in transport, net tourism, clothing and footwear led the increase in household spending as consumers dipped into lockdown savings.

In Q4, real household disposable income dropped by 0.1% whilst nominal households’ gross disposable income grew 1.3%, which was offset by quarterly household inflation of 1.4%.

In Q3, household disposable income adjusted for inflation declined by 0.2% compared to Q2 due to impacts from inflation on household budgets as well as a downward revision of pension contributions.

During the fourth quarter, real household disposable spending increased by 0.5%, underperforming from the initial expectations of 1.2% growth.

However, it was not all bad news, as the UK did manage to shrink its balance of payments to £7.3bn with the help of foreign investments, despite supply chain problems prevailing due to the pandemic.

Government officials monitoring the country’s fiscal condition predicted that with inflation reaching 9%, investors expect the recovery to slow down in 2022 since consumers face a decline in the standard of living.

Danni Hewson, Financial Analyst, AJ Bell said, “It might seem odd, but Omicron actually provided a substantial boost to UK economic growth in the last three months of 2021.”

“Growth was stronger than had been forecast and by the end of the year the UK economy was a hair’s breadth from where it had before the ravages of Covid.”

“But even in the dying days of 2021 inflation was already packing a punch. Household’s disposable income fell, people started to dip into savings as a way to offset those inflationary pressures, put simply people were having to pay more for what they wanted.”

“With the expectation that this year will deliver the biggest fall in living standards since the 1950’s alarm bells are clanging, and damage done to savings and pension contributions in the now will have consequences in years to come.”

“And the squeeze has only just begun, the pressures households were experiencing last year will be nothing compared to what is to come.”