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THERE’S ALWAYS NEXT YEAR Kyrgios rants and raves but Djok takes the Wimbledon men’s final
NINE HATS THROWN IN SO FAR – WITH MORE EXPECTED JAMES SILVER THE BATTLE to become Prime Minister began in earnest this weekend with a row over whether now is the right time to reverse tax hikes. There are now nine declared candidates to become Boris Johnson’s successors – with a tenth, foreign secretary Liz Truss, expected to join them later today or tomorrow. Yesterday saw a host of pledges to cut taxes from the various Conservative candidates, seemingly in rebuke to former chancellor and the favourite in the race Rishi Sunak’s position that the UK needs to see healthier public finances before bringing down a seventy-year-high tax burden. Amongst the more eye-catching promises was Sajid Javid’s pledge to scrap the hike in national insurance brought in earlier this year to fund parts of the NHS – brought in whilst Javid himself was health secretary. “I’m not sure I would have done it if
I had been chancellor, but I was focused on my job and I’m not trying to do other people’s jobs for them,” he said. Both he and fellow candidate Jeremy Hunt – the former health and foreign secretary – also promised to cut corporation tax to 15 per cent, down from a rate of 25 per cent as of April next year. The claims are an attempt to put clear blue water between themselves and Sunak, who in his campaign launch warned against “comforting fairytales” and has said tax cuts will need to wait until the nation’s pocketbook is in healthier shape after the pandemic. Sources in Javid’s camp pointed to former chancellor George Osborne’s decision to cut the top rate of income tax from 50p to 45p, which in turn boosted the Treasury’s overall take, as evidence that tax cuts can help the public finances whilst also stimulating growth. Liz Truss is expected to mirror Javid’s
call to reverse the national insurance hike when she enters the race this week, whilst another contender for the top job – Nadhim Zahawi – endorsed a ‘charter for tax cuts’ over the weekend. Already in the contest are Penny Mordaunt – who has seen the second-most endorsements by fellow Tory MPs so far – transport secretary Grant Shapps and Tom Tugendhat, the former soldier and now chair of the foreign affairs select committee, who yesterday promised a “fresh start” for the country and the Conservatives whilst also promising to look at reduced tax rates. They are joined by up and comer Kemi Badenoch and Brexiteerfavourite Suella Braverman. Paul Johnson, the director of the Institute for Fiscal Studies, said that due to an aging population Britain would need to “spend much more on (the) NHS, social care and pensions” and that to do so without tax cuts would require “major surgery to parts of the (the) welfare state”.
AUSSIE tennis bad-boy Nick Kyrgios yesterday gave his coaches, the umpire and a fan “who looks like she’s had 700 drinks” both barrels yesterday but it was his opponent Novak Djokovic who took home the title in the Wimbledon men’s final. £ ALL THE WEEKEND’S SPORT: PAGES 18-19
Ringfencing will send us back to bad old days in energy, warns challenger EXCLUSIVE
NICHOLAS EARL RINGFENCING customer credit balances will dampen innovation in the energy market, according to the boss of a renewables-only challenger. The boss of Good Energy, Nigel
Pocklington, told City A.M. Ofgem’s proposal to reform the energy market would benefit established players and hamper challenger firms with smaller reserves of revenue. He said: “If we’re not careful, we’ll go back to a world of four large energy companies – which
is where we came from 20-plus years ago.” Ringfencing refers to industry proposals to separate customer credit balances from the commercial operations of energy firms, by allocating the money into a separate account that can only be used for buying supplies for
households rather than on anything else, including investment. The concept is backed by Centrica, which owns the UK’s largest energy firm British Gas with over nine million customers. It has ringfenced customer credit balances as a matter of company policy since February, and has
warned hundreds of millions of pounds have already been lost from customer deposits amid the market carnage over the past nine months – which has seen 29 domestic suppliers collapse amid a sharp spike in wholesale costs. £ CONTINUED ON PAGE 3
INSIDE MUSK SET FOR BITTER TWITTER ROW P4 FINTECH FUNDING REVIEW P5 PUNTERS SHUNNING PINTS P8 AMAZON PRIMED FOR RECORD DAY P11 MARKETS P12 OPINION P14
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MONDAY 11 JULY 2022
STANDING UP FOR THE CITY
Policy battles are crucial but it’s philosophy that matters as PM
T
HE HEADLINE on our front page – about the Tories’ row over tax cuts – is not strictly correct. The argument is instead about cancelling a proposed tax hike – corporation tax’s increase to 25 per cent – or reversing another recent increase, to national insurance. Alas that nuance doesn’t fit into a headline, so here we are. The question for the Conservatives going forward is
THE CITY VIEW more than semantics, though. Over the course of this contest, likely to be a fortnight of mild chaos followed by a month of the final two candidates pitching for votes from the party’s members, it is vital that we end up with more idea of what the party
actually stands for these days. It has become a truism that businesses like certainty. That’s true in most senses, though you don’t hear firms complaining about an uncertain tax environment when there’s a surprise fall. It is more that everybody – businesses and the public alike – deserve to know the general direction of a political party. A gradual push to a smaller state and an aversion to grand schemes? A ratcheting up of the
state’s involvement in the economy? One of the fairest criticisms of the Johnson administration is that it lacked any kind of direction politically; it is as true today as it was a year ago to say that attempting to parse meaning from ‘Johnsonism’ is a fool’s pursuit. That is why it was so easy for his rivals to turn on him: not only had they lost faith in him as a prime minister, but he offered precious little idea of what ideas and vision he had
FOR GOODNESS’ SAKE, DON’T SHAKE IT! Soho’s waiters compete in ‘village fete’ race
that might have been worth fighting for. Our instinct is that a Johnson-less leadership election is likely to be less of a celebrity circus than that we had in 2019. But candidates shouldn’t get bogged down in policy, or discussions of fiscal headroom. Only one question really matters: how do you ensure Britain has a stronger economy in five, ten and fifteen years than it does now. The answer is as ever thus: lower taxes, freer markets.
WHAT THE OTHER PAPERS SAY THIS MORNING THE TIMES
APPLE’S UK STORES PAID ONLY £800,000 IN TAX
Apple’s retail division paid just £796,000 in tax last year after making hefty payouts to employees through a stock option scheme – minimising its tax bill by £9.2m. The company’s UK retail arm made pre-tax profits of £38.2m.
THE TELEGRAPH
PUTIN ‘MOST LIKELY’ TO CUT GAS SUPPLIES TO EUROPE
Vladimir Putin is “most likely” to cut Europe from Russia’s gas supply in a move that will spark rationing and chaos across the Continent, France’s economic and finance minister has warned.
THE FINANCIAL TIMES
UK RISKS FALLING BEHIND EU ON HAZARDOUS CHEMICAL STANDARDS
The UK government has announced it will not match new EU restrictions on a number of potentially hazardous chemicals, including the ‘rubber crumbs’ used to make artificial football pitches.
Economy headed for prolonged slump as Staff walk out at 114 Crown Post weaker consumer spending chills output Offices today over worker pay JACK BARNETT THE UK economy is headed for a protracted slump and possibly a recession caused by soaring inflation hitting households and businesses, revealed a survey published yesterday. Output has dipped to its lowest level since February last year, when the country was in the teeth of the most onerous Covid-19 prevention measures, according to consultancy BDO. The firm’s index dropped nearly three points to around 98 last month, below the 100 threshold that separates long-term growth and contraction.
Weaker consumer spending prompted by Brits responding to rampant inflation eating into their finances weighed on services activity in June. Living costs are up 9.1 per cent over the last year, the fastest acceleration since the early 1980s. Wages have failed to keep pace, meaning consumers are unable to buy the same goods and services. The cost of living is projected to top 11 per cent this autumn, indicating the economy is in for prolonged period of weak growth or even a recession. BDO’s inflation index climbed to its
highest level since records began. Supply chain disruption caused by China locking down trading hubs to deal with virus cases, the RussiaUkraine war and higher input costs chilled manufacturing activity. Despite the growing body of evidence suggesting a recession will hit soon, the jobs market remains resilient. BDO’s employment index topped pre-pandemic levels last month. Kaley Crossthwaithe, partner at BDO, said: “The continued falls in output and confidence provide a stark warning of the challenges businesses face.”
LEAH MONTEBELLO OVER one hundred Crown Post Offices will be disrupted by strikes today after workers voted in favour of a staff walk out over pay. The industrial action of 1,500 staff will cause “considerable delays” for consumers, the Communications Workers Union (CWU) said. Union members rejected a pay offer by the Post Office, which the union said was worth three per cent and a £500 lump sum. Meanwhile, the postal company said the majority of its branches would be unaffected by the CWU’s
industrial action. “There are 114 branches, typically in city centres, that are directly managed by the Post Office and on previous strike days over a third have opened as usual,” a Post Office spokesman said. Today marks the third strike by posties this year, and comes as supply chain and admin workers, who deliver cash, valuables and essential supplies to Britain’s 11,500 sub-post offices, gear up to walk out this Thursday. CWU’s Andy Furey said the dispute was about “dignity and respect for hard-working employees”, and reaching a reasonable pay deal.
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S&P 500 to shed fifth of value on tough recession JACK BARNETT WALL Street will suffer heavy losses if the US economy tips into recession, investment bank Goldman Sachs said in a note to clients over the weekend. The S&P 500 index, a broad measure of corporate America, will shed 19 per cent on the year if the American economy suffers a tough recession, Goldman said. Concern is growing that the US may already be in the teeth of a slump. The economy contracted 1.6 per cent over the first quarter, meaning it would tip into a technical recession – two consecutive quarters of contraction – if it shrank in the second quarter. Similar to the UK, the US is being spiked by the steepest inflation spike in four decades, with prices accelerat-
ing 8.6 per cent over the last year. Higher living costs are piling pressure on household finances and businesses’ bottom lines, weighing on economic activity. A rapid rate rise cycle launched by the US Federal Reserve to tame prices, which saw the central bank lift borrowing 75 basis points for the first time since 1994 last month, is adding to the squeeze on the econThe Wall Street bull may be heading for storage omy. New stateside figures published this Wednesday are expected to show inflation persisting. Goldman said financials would be hit hard by an economic reversal. The warning comes as US lenders’ earnings season kicks off this week when Morgan Stanley and JP Morgan update markets on Thursday.
THE HIGHER price of oil will be reflected in increased airline fares, the boss of the international industry body warned yesterday. “Oil is the single biggest element of an airline’s cost base. It is inevitable that ultimately the high oil prices will be passed through to consumers,” Willie Walsh, chief
executive of the International Air Transport Association (IATA), told the BBC yesterday morning. Walsh, who formerly ran British Airways owner IAG, also defended his decision at his former employer to lay off a number of staff at the beginning of the pandemic, which some have blamed for delays and disruption at airports. The outspoken chief also laid into
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Ringfencing risks limiting competition CONTINUED FROM PAGE 1
The files reflect the culture during Kalanick’s oft-criticised leadership of the firm
Uber ‘won’t make excuses’ after leak of historic internal emails LEAH MONTEBELLO UBER have asked customers to judge the firm by how much progress it has made in the past five years after a tranche of emails and internal messages were revealed this weekend. Among the revelations published by The Guardian, all of which stem from founder Travis Kalanick’s period at the firm, were a very close relationship
with a series of senior European politicians just as the firm was looking to change regulatory policy to its advantage and messages which suggested the firm knew some of its practices were in breach of local laws. Kalanick quit in 2017 after a string of scandals. An Uber spokesperson said “we have not and will not make excuses for past behaviour... not in line with our values.”
The energy giant’s chief executive Chris O’Shea slammed Ofgem for failing to commit to 100 per cent ringfencing last month, instead calling for 30 per cent of balances to be protected while continuing its consultation with the industry. Pocklington suggested ringfencing was an example of a policy that looked appealing on first glance – but had serious drawbacks that could harm the industry when assessed more thoroughly. For instance, he argued it would drive up energy bills as suppliers would need to raise more revenue to power their operations. He said: “It looks good, but it will add costs to people – financing costs – and there should be other ways of ensuring that a well-run energy business looks after customer deposits and can maintain solvency without necessarily going to this degree of protection.” The energy boss also echoed the concerns of So Energy’s co-founder Simon Oscroft, who fears it will stifle innovation and would leave the energy market once again dominated by the largest players, with damaging consequences.
Get used to higher prices, aviation boss Willie Walsh tells frustrated passengers JAMES SILVER
NEWS
government over its decision not to provide industry-specific help during the rebound from the pandemic. The IATA chief also said that Heathrow could have prepared better for the uptick in passenger demand after the easing of travel restrictions. Over the weekend, British Airways announced a host of further flight cancellations over its summer and autumn schedule.
Willie Walsh suggested high oil prices would inevitably push up fares
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Whitehall hits pause button on Truphone sale to German tycoon JAMES SILVER A UK MOBILE tech firm’s sale to a German billionaire has been put on temporary hold by the government over national security concerns. Kwasi Kwarteng, the business secretary, personally signed off on the suspension of the Truphone sale, a move first reported by Sky News’ Mark Kleinman.
Truphone, which employs around 400 people, operates mobile virtual networks and has one contract with BT. One of its owners is Roman Abramovich, the now former owner of Chelsea FC, who has been sanctioned by the British government as a result of his links to Russian president Vladimir Putin. The sale to German-born
entrepreneur Hakan Koc was due to be completed before the firm is forced into administration by spiralling losses. The UK government has been increasingly muscular in recent months in its oversight of takeover deals involving UK firms and foreign buyers. A host of defence firms are waiting for their own takeovers to be given the OK by Whitehall.
Musk vs Twitter: Legal fight looms over $44bn deal LEAH MONTEBELLO ELON MUSK is gearing up for a lengthy legal battle after Twitter said it would be suing the billionaire for pulling out of a planned $44bn (£37bn) takeover. Musk accused the platform of breaching the terms of the takeover agreement as well as making “false and misleading representations”. “Sometimes Twitter has ignored Mr Musk’s requests, sometimes it has rejected them for reasons that appear to be unjustified, and sometimes it has claimed to comply while giving Mr Musk incomplete or unusable information,” Musk’s lawyer said in a statement filed to the US Securities and Exchange Commission (SEC). According to Musk, Twitter’s board failed to provide data that would enable him to make an independent assessment of the prevalence of fake or spam accounts. Following Musk’s dramatic backtrack, Twitter chairman Bret Taylor said the company’s board was “committed to closing the transaction” agreed upon
with the entrepreneur and it would plan “to pursue legal action to enforce the merger agreement”. Under the agreement’s terms, Musk must pay $1bn to break off the contract. Executive director of the Berkeley Center for Law and Business Adam Sterling has questioned Musk’s legal arguments, suggesting they had “questionable standing”. He said the Tesla founder “first focused on bots on the platforms but also performance of the company so, he’s kind of throwing all these arguments out there,” he told CNBC. Some legal wonks have even suggested that Musk could be forced to complete the takeover because of these weak legal grounds. It is understood that Twitter is expected to file a lawsuit in Delaware as soon as today. Twitter has forbidden staff via an internal memo from discussing the merger. Musk first announced his takeover approach in April
Culture secretary Nadine Dorries has been a key driver for a sale into private hands
Channel 4 privatisation still on track despite political turbulence LEAH MONTEBELLO CHANNEL 4’s privatisation is still on track, despite reports that Boris Johnson’s resignation may have scuppered the broadcaster’s £2bn sale. City A.M. understands that plans are proceeding at both government and corporate level, with JP Morgan advising on the workings of the deal. There had been speculation that the government may u-turn on the project following public backlash, as well as
the precarious position of Nadine Dorries as culture secretary. One Whitehall source told The Telegraph : “Everything is in a holding pattern at the moment.” Channel 4 declined to comment on reports, but a spokesperson for DCMS said it had been clear that a change of ownership was “necessary” for the future growth of the broadcaster, and that the media bill was incoming. The bid process, which could attract ITV and Paramount, is expected in 2023.
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Stock exchange backs review into UK funding CHARLIE CONCHIE THE LONDON Stock Exchange Group (LSEG) has thrown its weight behind a new review of the fintech funding landscape today as venture capital dries up and valuations plunge in the face of a looming recession. The new Review into Fintech Funding, launched by industry group Fintech Week London (FTWL) today, will look to bring together regulators, investors and finance firms to address the rapid deterioration of the venture capital landscape for fintech. FTWL said it had already received the backing of the London Stock Exchange for the new review and was now looking for input from across the industry as it kicks off Fintech Week London today. Boss Raf de Kimpe told City A.M. that the sharp plunge in valuations and funding would dominate much of the conversation throughout the week. “Now more than ever, especially post-
pandemic and with what’s happening in the economy, it’s important for people to find the right partnerships and the right collaborations and even learn from each other on how to tackle this,” he told City A.M. The review comes as central banks across the world hike interest rates and put an end to the cheap money that has fuelled an investment frenzy for the past decade. Global venture capital continued its slowdown in the second quarter of the year with funding plunging nearly 23 per cent on the first quarter. Around $108.5bn (£90.1bn) was raised across 7,651 deals last quarter — marking the biggest quarterly percentage drop in deals and the second largest drop in funding in a decade, according to data from analytics firm CB Insights. Fintech giants including Klarna and Coinbase have been slashing headcounts and tapering back growth plans to brace for the downturn.
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Capco merger will see execs get millions EMILY HAWKINS
The software firm said it would have access to more investors in the US
Software giant Atlassian leaves UK for lure of US tech investment CHARLIE CONCHIE AUSTRALIAN software giant Atlassian is quitting the UK for the US in a fresh blow to London’s ambitions to establish itself as a global tech hub. The £45bn Nasdaq-listed firm moved its domicile to London in 2014 but will now transfer its parent entity to the US in the hunt for a deeper pool of tech investors, the Telegraph first reported.
Following a series of high profile flops including Deliveroo and THG, ministers have launched a campaign to promote the capital as a tech centre in recent years, with major reviews of the UK’s listing regime and fintech sector. But efforts have been dealt a number of heavyblows. British chipmaker Arm, for example, has indicated it is heading for a primary listing in New York despite lobbying from ministers.
TOP BOSSES at Covent Garden estate owner Capital & Counties Properties (Capco) and Shaftesbury will be awarded millions in shares after the merger between the two companies is completed. Capco’s top brass will receive shares amounting to £7.4 million while Shaftesbury’s senior executives will receive shares worth £5.3 million. The £3.5bn merger will see the West End landlords bring together the vast majority of London’s theatre heartland under one firm, titled Shaftesbury Capital, encompassing 2.9m sq ft of the capital. Details of the merger mean that Ian Hawksworth, boss of Capco and incoming chief of the new firm, is set to receive some 2.35m shares, worth £3.5m at the time of writing, and finance director Situl Jobanputra will be awarded some £2.3m in shares. Bosses will be required to hold onto the shares for two years, according to The Sunday Times. The share awards vest automatically when the deal is completed, Capco and Shaftesbury’s remuneration policies state.
Revolut regulatory exec resigns amid growing tensions with UK watchdog CHARLIE CONCHIE ONE OF Revolut’s top regulatory chiefs has stepped down from her role just weeks after boss Nikolay Storonsky criticised the Financial Conduct Authority’s (FCA) sluggish progress on the firm’s banking licence application. Deirdre Halligan, head of global affairs, wealth and trading, oversaw the firm’s expansion regulatory
affairs, including its relationship with UK regulators. Her departure, first reported in The Telegraph, comes as tensions between Revolut and the FCA grow over the speed of movement on its licence applications, including a full banking licence and fully registered status to provide crypto services. Boss Nikolay Storonsky criticised the regulator for being inefficient in an
interview with City A.M. last month, saying the firm’s progress towards a banking licence had lagged behind international competitors. Halligan’s departure marks the latest in a slew of resignations, with Harry Gill, Revolut’s global head of regulatory compliance, resigning in May and the chief of operational risk and head of UK compliance also leaving in recent months.
Revolut boss Nikolay Storonsky recommended the FCA hire “more efficient people”
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UK firms need certainty now, Boden warns CHARLIE CONCHIE POLITICAL volatility is causing “uncertainty” for businesses, the chief of digital bank Starling has warned as she voiced concerns that plans for financial services reform risk being blown off course. In comments shared with City A.M., Anne Boden, who founded the digital bank in 2014, warned the tumult of Boris Johnson’s resignation last week risked disrupting the government’s economic and business reform agenda. “I would be sorry if current circumstances led to a roadblock on some key and much-needed legislation and reforms,” she said. “But a bigger issue is that what we
have now is creating uncertainty. And that makes it difficult for individuals and businesses to make well-informed decisions.” Boden’s comments come amid fears that the government could delay plans to bring forward a new financial services bill – designed Boden has become a flagbearer for the UK’s fintech community to slash EU-era financial services regulation and boost the City – in the next session of parliament. Former Chancellor Rishi Sunak had been expected to lay out details of the plans in a speech to City bosses this month, but the event has been scrapped in light of Johnson’s resignation last week.
Trade unions attack agency worker plans ALAN JONES
Teachers and NHS staff have demanded pay rises at least in line with inflation
Unions call on ministers to stop delaying public sector pay deals LEAH MONTEBELLO UNIONS have called on ministers to stop delaying public sector pay deals, with workers threatening to quit in the coming weeks. The country’s biggest union, Unison, said it had written to the new health secretary, Stephen Barclay, over the weekend to see the unpublished recommendations of
the NHS pay review body. Unison’s Sara Gorton said: “The government’s leadership vacuum is no excuse for further delay on putting NHS pay right”. The National Association of Schoolmasters Union of Women Teachers also wrote to the new education secretary, James Cleverly. A government spokesperson said it was considering recommendations.
UNIONS have accused the government of “spoiling for a fight” by pressing ahead with controversial moves to allow agency workers to replace strikers. The TUC called on MPs to reject “pernicious anti-union measures”, which it said threatens public safety. Ahead of debates and votes on planned legislation, the TUC said new laws will worsen such disputes. The proposals, put forward by the government before Boris Johnson announced his intention to step down, were drafted in response to the rail dispute which has seen thousands of workers go on strike in recent weeks. The TUC said there has been no consultation with unions and added that the government’s plans could breach international law. TUC chief Frances O’Grady said: “MPs must waste no time and vote down this brazen attack on workers, which is the desperate last gasp of a government in turmoil.” “It is not only cynical and ideological, but a threat to public PA safety,” she added.
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City eyes clues from Bailey on steeper rate rise JACK BARNETT HAWKISH remarks from Bank of England governor Andrew Bailey during a grilling by MPs this week will dial up expectations for a steeper rate rise soon, according to City analysts. Markets will be watching for signs of Bailey following other rate-setters in hinting the Bank is open to a 50 basis point rise at its next meeting on 4 August when he is quizzed by the treasury committee today. The central bank’s chief economist Huw Pill last week reinforced its latest forward guidance that it will bear down on “more persistent inflationary pressures”. A further indication from Bailey at either the parliamentary evidence session or in a separate speech delivered tomorrow will prompt traders to price in an acceleration in policy tightening, prompting UK government debt yield
to jump. “Bottom line: the need for speed is clear. Any hints (or lack thereof) from the governor next week on staying open to bigger rate hikes, as he testifies to the [Treasury select committee] (on financial stability mainly) or in his speech on Wednesday on the economic landscape, will be important in sustaining current market pricing, which sees the Bank rate rising above 2.75 per cent by year-end,” Sanjay Raja, senior economist at Deutsche Bank, said. Bailey and Pill voted for a 25 basis point rise at the Bank’s last meeting, but evidence is growing suggesting they will join the three members of the monetary policy committee who backed a 50 basis point jump in June. The Bank’s nine strong rate-setting committee have lifted borrowing costs at the last five meetings, taking them to a 13-year high of 1.25 per cent.
MAC ATTACK Burberry salary plans under fire from shareholder advisory firm
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SMEs should get VAT relief, says Tide CEO JAYNA RANA
SHAREHOLDER advisory body PIRC has called for a ‘no’ vote on pay at this week’s Burberry AGM, saying the ratio of executive pay to average pay at 44:1 is too high. The fashion firm will also release first quarter earnings this Friday.
THE GOVERNMENT should provide VAT relief for small businesses to help them cope with rising costs, the chief executive of business banking platform Tide has said. Oliver Prill, who became chief executive in 2018, said small businesses are finding it extremely tough in the current economic climate and that the UK could see a huge number of small firms shut up shop as a result. “We urge the UK government to help small businesses through the crisis by introducing VAT relief for them until the end of the full tax year,” Prill said. “Small business owners are doing their best to keep their companies running, including getting help from their family and friends, but they need more support.” According to a survey of 1,170 Tide customers last month, one in five small firms fear they may not survive the year as costs soar. A rise in fuel and energy prices dominated business’ concerns, while rising inflation and supply chain issues also worried small enterprises.
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JD Wetherspoon hopes to buck trend with cheap pints as spending slows EMILY HAWKINS INVESTORS will be eager to see if the cost of living crisis has made any dent to JD Wetherspoon sales in the pub chain’s quarterly update this week. Analysts said a wider downturn in consumer spending could be mitigated by the chain’s cheaper prices enticing drinkers but thin margins risked a gloomy verdict. Broker Liberum said the Londonlisted firm was one of its least favoured stocks last week, forecasting
“weak post-Covid sales momentum, high labour intensity and narrow margins” on Wednesday. “Furthermore, the estate size is shrinking, and the balance sheet leverage is one of the highest in the sector,” the note added. Pubs have been hammered by scorching increases in energy and labour costs in recent months all while recovering sales momentum after the Covid-19 pandemic restrictions. However, Wetherspoons’ like for
Royal Mail chair says firm is at a ‘crossroads’
LEAH MONTEBELLO
ROYAL Mail chairman Keith Williams has said unions shouldn’t expect a nostring pay deal “where nothing changes”, as the firm balances dwindling productivity alongside rising union tension. With both Unite and the Communication Workers Union (CWU) taking aim at Royal Mail, Williams told The Sunday Times that the company has reached a “crossroads moment”. “I’ve been very clear with investors that this is a difficult, probably the most difficult, union relationship job there is,” he said, before adding: “We’ve run out of road”. Royal Mail said it offered a 5.5 per cent pay rise to workers, with a further 3.5 per cent dependent on achieving efficiencies. As it stands, Royal Mail’s wage bill is £5.5bn, and Williams said that even the 5.5 per cent offer would result in a “headwind” of £250m. “What is it that offsets that headwind? Previous agreements with the union have delivered pay but they’ve not delivered the productivity to offset it, in a market where our
like sales in the last couple of weeks of the third quarter were “slightly positive”, with it remaining to be seen whether this has continued, noted Matt Britzman, equity analyst for Hargreaves Lansdown. He added: “In March, cautious consumers hadn’t impacted trading. Given the cost of living crisis has evolved since then, it’ll be interesting to hear whether that trend has shifted at all.” The budget pub chain’s share price has fallen 45 per cent in the past year.
JD Wetherspoon may have reaped the rewards of drinkers looking for cheaper pints
HUMMUS WOES Poor weather and conflict in Ukraine to heavily deplete chickpea crop
CHARLIE CONCHIE
revenue has been flat. “The problem with where we are is that the unions want a no-strings pay deal where nothing changes. But we need to pay for that pay deal through productivity,” he said. CWU’s deputy general secretary Terry Pullinger previously lambasted offers as “totally inadequate” and is trying to rally 115,000 workers to prove it. CWU are expected to post ballot results on 19 July. Unite separately announced that 2,000 Royal Mail managers would strike on 20 July to 22 July. “They [Royal Mail] are being driven entirely by a culture of greed and profiteering which has seized a 500-yearold essential service, driving it close to ruin”, Unite general secretary Sharon Graham said. Royal Mail said it was “disappointed” by Unite’s action. Royal Mail is also facing an Ofcom inquiry into its failure to meet targets in the past year, missing the first class and second class delivery targets by 12 and three per cent respectively. Chairman Keith Williams said Royal Mail had ‘run out of road’ in talks
Saucy deal sees Heinz back on Tesco shelves
CHICKPEA supplies could be down some 20 per cent this year, the Global Pulse Confederation has forecast. War has impacted harvests in Ukraine and Russia, driving demand for farmers in the US. However, bad weather has also hammered US crops.
BAKED beans will now return to the shelves of Britain’s largest supermarket with Tesco and Heinz resolving their price war over the weekend. In a statement on Friday, Tesco said “lorries full of Heinz products” will “hit the road shortly”, after the grocer stopped selling the products at the end of June. It comes after Tesco said it would stop stocking Heinz products last month over “unjustifiable price increases” which it was not willing to pass on to customers. However, Tesco and Heinz appeared to resolve the dispute on Friday, with Tesco saying it was “great to be back together” as it announced its restocking of Heinz products. Neither firm shared details of the agreement. It is the latest sign of the increasing pressure on both grocers and suppliers, with inflation pushing up costs throughout supply chains. Tesco has also been tied up in a price row with Mars, which has halted its supply of Whiskas pet food to the supermarket. Grocery bosses including Asda chair Lord Stuart Rose have called for government to step in more aggressively to give consumers more ability to absorb higher prices amid slow growth.
Stone cold sober: One in three pub trips alcohol-free as pints shunned EMILY HAWKINS
Spain and France have at least five times the UK’s market share for low and no drinks
ONE IN three pub visits are stone cold sober as Brits shun beer for alcoholfree and low-alcohol tipples, according to new research. More than a third (37 per cent) of restaurant visits are also alcohol-free, according to a freshly published report from KAM and alcohol-free beer
brand Lucky Saint. Just over half of UK drinkers drink fewer than ten units of alcohol per week while this cohort are the most likely to visit a pub at least once per month (87 per cent). Drinkers said they opted for soft drinks on nights out due to having to drive, followed by wanting to stay alert for a big day the next day (31 per cent),
not drinking within a social group (30 per cent) and wanting to attend an activity like sports shortly after. The UK needed to re-think its idea around the ‘non-drinker’ in pubs, Luke Boase, Lucky Saint founder, said. “We’re at the start of a cultural shift in our attitudes towards drinking in the UK, Boase added, pointing to trends in Europe.
MONDAY 11 JULY 2022
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Firms continuing to prioritise net zero despite economic challenges ALAN JONES MANUFACTURERS are embracing the charge towards net zero and decarbonising their businesses as the sector moves to slash greenhouse gas emissions, cut energy use and switch to renewable and sustainable energy sources, according to a report. Research by Make UK and technology company Siemens suggested that most manufacturers say decarbonisation of their businesses is now an important
priority despite unprecedented economic challenges. A survey of 134 companies found that nearly half are implementing decarbonisation plans while a further quarter will start decarbonising within the next 12 months. But the study also revealed a lack of knowledge of government schemes, which Make UK called a “major block”. Stephen Phipson, Make UK chief exec, said: “Britain’s manufacturers have long shown that they are at the forefront of innovation globally and
they have already gone a long way to improve their processes... in the quest to reach net zero. But in order that they continue at speed, business needs government to play its part in driving the process forward.” While numerous strategies have been announced, progress has been limited at best. “Government must deliver regular updates to help business understand the intentions and give them the confidence to make investment PA decisions.”
Manufacturers are continuing efforts to decarbonise their production practices
Electrify UK steel production, says green think tank NICHOLAS EARL ONE OF the UK’s leading environmental think tanks has urged the government to move away from coal imports to meet the country’s steel production needs, and instead boost the development of new electric furnaces. In its latest report, Green Alliance argues that shifting from blast furnaces to electric arc furnaces in the UK and investing in scrap could slash steel industry emissions by 87 per cent by 2035. Green Alliance predicts the move would more than double domestic scrap use by 2035, making more of existing resources and cutting the UK’s dependence on coking coal by 98 per cent. A new generation of hydrogen supplied furnaces could then cover any remaining needs for virgin steel in time for the phase out of traditional blast furnaces over the next decade and a half. Steel is vital for manufacturing green infrastructure, such as electric vehicles and turbines, but its current production process is carbon intensive. It is currently responsible for 15 per cent of the UK’s industrial emissions.
Electric arc furnaces have a low carbon footprint and allow for the recycling of domestic scrap – potentially reducing the need to import iron ore and coking coal. In the future they could also be coupled with plants that use hydrogen to create virgin steel. Low carbon electric arc furnaces are already used by some UK steelmakers to recycle scrap steel, but they currently produce lower volumes than traditional carbon blast furnaces. As it stands, the UK exports around 90 per cent of all scrap steel, most of which is poorly sorted and consequently of low value. Green Alliance added that this approach would also make the economy less vulnerable to global supply chain shocks, reducing reliance on coking coal producers such as Russia, and protect jobs in the UK’s steel heartlands. The report has been published following the government’s decision to delay making a verdict on opening a new coal mine in Cumbria – the first of its kind in 30 years. The mine would produce coking coal which would be used for the manufacturing of steel – an industry the government remains keen to protect on national security grounds.
UK consulting sector sees 18 per cent growth JAYNA RANA
Since last August, 28 energy suppliers have collapsed
Failures of UK energy suppliers risks adding £164 to energy bills DANIELLE DESOUZA THE FAILURES of energy suppliers could potentially add another £164 to customers’ bills, amid soaring energy prices and the cost of living crisis. A report from charity Citizens Advice found that the bill for supplier failures, including the administration costs for Bulb, stands at £4.6bn. This could result in customers forking out an extra £164, the organisation said. The charity has called on the government to “urgently review” how different outcomes of the sale of Bulb
may affect customers, to prevent bills from spiralling out of control. Since the beginning of last August, 28 energy suppliers have failed. Bulb was placed into “special administration” when it collapsed last November and was propped up with an initial taxpayer loan of £1.7bn. The taxpayer bailout was the biggest since Royal Bank of Scotland, Lloyds Banking Group and Halifax Bank of Scotland in the 2008 financial crisis. The report comes days after the energy price cap was tipped to rise to PA £3,364 in January.
BRITAIN’S consulting sector grew by 18 per cent in 2021 and is forecast to experience further strong growth this year, the Management Consultancies Association (MCA) has said. According to the group’s latest Annual Industry Report, many businesses kick-started new projects last year which had previously been delayed while others focused on digital transformation and achieving sustainability goals as they adapted to a new post-pandemic economy. Consultancy work across all industries experienced growth, but the biggest increases were seen in the infrastructure, manufacturing and energy sectors, which were up by 34 per cent, 29 per cent and 21 per cent respectively. The heightened demand has also led to a rise in jobs, up by 14 per cent with 88,000 management consultants now employed across the sector. Tamzen Isacsson, the industry body’s chief executive officer, said: “Clients across the world have turned to the UK’s leading professional sector for expert help during a period of considerable disruption and high demand for digital transformation.”
Cyber security ‘shortfalls’ see EDF placed under further monitoring JAYNA RANA
EDF owns and runs the UK’s nuclear power fleet
FRENCH Power Giant EDF is being scrutinised by the UK’s Office for Nuclear Regulation (ONR) after it identified shortfalls in the firm’s cyber security defences. Following a number of routine inspections over the past year, the regulator said it had found “shortfalls
in governance, risk and compliance and certain technical controls” at EDF and that it was putting the company under “enhanced attention”, The Telegraph reported. EDF is upgrading its IT systems and restructuring its internal security department, which was reportedly contributed to extra monitoring. EDF confirmed the additional ONR
scrutiny and added that the body’s findings “do not relate in any way to nuclear safety and the safe operation of EDF’s UK reactors”. “We are constantly striving to improve security and work with various bodies, including the ONR, to achieve this. The cyber threat is a constantly evolving area and we want to stay ahead of the threat.”
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MONDAY 11 JULY 2022
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Biden to speak to Xi Jinping after ‘candid’ lower level US-China talks DAVID BRUNNSTROM US SECRETARY of State Antony Blinken yesterday said the United States expects President Joe Biden and Chinese leader Xi Jinping will have the opportunity to speak in the weeks ahead. However, when asked at a news conference in Thailand if Biden and Xi might hold a first face-to-face meeting as leaders on the sidelines of the G20 summit in Bali in November, Blinken said he could not say what
might happen then. He said he also could not say who the United States would be sending to the APEC summit in Thailand the same month. “With regard to President Xi and the President Biden, our expectation is that they will have an opportunity to speak in the weeks ahead, and I can’t talk to what may happen in the fall,” Blinken said in response to a question. The United States calls China its main strategic rival and says high-
level engagement is important to keeping the difficult relationship with Beijing stable and preventing it from veering inadvertently into conflict. Blinken spoke a day after a meeting of more than five hours with Chinese foreign minister Wang Yi on the Indonesian island of Bali, where he went for a gathering of G20 foreign ministers. Both Blinken and Wang described Saturday’s talks – their first in-person discussions since October – Reuters as “candid”.
US President Biden will attend the G20 in Bali in November
Sri Lanka limbo continues after mass protests DEVJYOT GHOSHAL
Thousands of protesters stormed the presidential palace in Sri Lanka on Saturday, when the president and prime minister agreed to resign
LEADERS of Sri Lanka’s protest movement yesterday said they would occupy the residences of the president and prime minister until they finally quit office, the day after the two men agreed to resign leaving the country in political limbo. Thousands of protesters stormed President Gotabaya Rajapaksa's home and office and the prime minister’s official residence on Saturday, as demonstrations over their inability to overcome a devastating economic crisis erupted into violence. Rajapaksa will quit on July 13, while Prime Minister Ranil Wickremesinghe also said he would step down to allow an all-party interim government to take over, according to the speaker of parliament. “The president has to resign, the prime minister has to resign and the government has to go,” playwright Ruwanthie de Chickera told a news conference at the main protest site in Colombo. Flanked by other leaders helping coordinate the movement against the government, she said the crowds would not move out of the official residences of the president and prime minister until then. Throughout yesterday, curious Sri Lankans roamed through the ransacked presidential palace. Reuters
Fifteen dead in east of Ukraine after Sunday rocket attack by Russians ANNA VOITENKO
Rescuers tried to reach those trapped in the rubble of the struck apartment block
AT LEAST 15 people were killed and two dozen more are feared trapped after Russian Uragan rockets hit a fivestorey apartment block in Ukraine’s Donetsk region, local officials said yesterday as rescuers picked their way through rubble. Ukraine also reported clashes with
Russian troops on fronts in the east and south, while Moscow said its forces struck Ukrainian army hangars storing US-produced M777 howitzers, a type of artillery, near Kostyantynivka in Donetsk region. Donetsk governor Pavlo Kyrylenko said the strike on the apartment building took place on Saturday evening in the town of Chasiv Yar.
The regional emergency service gave the death toll at 15 yesterday afternoon, adding that 24 more people could still be under the rubble. Russia, which continues to say it is only conducting a “special military operation” to demilitarise Ukraine, denies deliberately attacking Reuters civilians.
MONDAY 11 JULY 2022
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PRIMED FOR DISCOUNT DAY Amazon set to smash sales records as cash-strapped Brits turn to Prime Day, Emily Hawkins reports
L
AST year, sales during Amazon’s discount bonanza – known as Prime Day – hit another new record, raking in just shy of £10bn in one day alone. Now, the e-commerce giant will be hoping to see more discount-hungry shoppers than ever from Tuesday, as household budgets tighten. With recent BDO data revealing that homeware sales dropped eight per cent in June as shoppers were wary about purchasing big ticket items, Prime Day will see the Seattle-based behemoth entice hesitant shoppers with huge discounts. Big ticket or “near-future necessities” could be alluring purchases on Prime Day as shoppers become “more planned and considered” with their spending. White goods and back-toschool items have been pegged as the categories to watch. Amazon may also see a decline in ‘nice-to-have’ impulse buys, according to Quantum Metric retail marketing director and former Amazon product manager Elissa Quinby. “We’re seeing people prioritise spending on necessities and cutting back on everything else,” Quinby said. Amazon has also got a second Prime Day in the works, later in the year,
We’re seeing people prioritise spending on necessities and cutting back on everything else
Amazon’s autumn Prime Day will compete with China’s, Singles Day, which raked in $74bn sales for Alibaba last year when energy bills will surge further amid the colder months. Analysts predicted the next Prime Day would be around October and
focus on gifting in the run up to the Christmas period. “This move would indicate that Amazon is already anticipating consumers
continuing to feel the pinch ahead of the festive season and is trying to get a greater share of consumers’ wallets ahead of the Black Friday/Cyber Mon-
day sales,” Quinby added. Elevated living costs pose a “much greater risk” for brands than Amazon, Hugh Fletcher, head of consultancy and innovation at Wunderman Thompson Commerce, told City A.M. With six in ten consumers telling Wunderman they were more inclined to switch brands amid historic inflation, shoppers will flock to platforms with “access to a huge range of products” and “nowhere is better for range than Amazon,” Fletcher said. Amazon is set to rake in some £1.4bn from sales in the UK alone, which would take small firms some 314 years to accomplish according to analysis from Real Business Rescue.
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– WHERE TO ISAS UNWRAPPEDTHIS TAX YEAR PUT YOUR MONEY Money languishing in savings accounts can be put to better use this ISA season, as Suzie Neuwirth reports
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at a 30ITH UK inflation surging year high due to supply energy costs and for inchain issues, the casesaving, vesting, rather than been greater. your money has never are still hovering Interest rates low, meaning that around an all-timesavings account or a money held in eroded in cash ISA will be significantly real terms. ISA season, people As we head into their tax-free aluse to still looking to 5 April will need lowance before of inflation eroding weigh up the risk the risk of investtheir savings versusasset classes such as ing their money in peer-to-peer loans. or stocks and shares tax year, the For the current 2021/22 ISA can save in an inmaximum you not pay tax on any is £20,000. You do gains accrued within terest or capital an ISA wrapper. are exempt from payThis means you in on tax, which kicks ing capital gains than £12,300 from any profit of more an investment. into an ISA by You must put moneyfor it to count toyear the end of the tax allowance. Any unwards this year’s not roll over into used allowance doesuse it or lose it! so the next tax year, of opportunities on With a plethora can be overwhelmoffer, the ISA market the best places ing, so we have analysedmoney. to put your hard-earned
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of the fund as the “You should think in April, investment and indiwill hit six per cent main course of your plates – slightly more better, inflation that investors should be looking fence waiting for vidual shares as side more to sitting on the be the time to lock in meaning above six per cent to avoid risky, but you may consider them The Bank of England of 0.1 per cent to Society, according might for returns low Historic stock mar- fun and interesting to follow. Coventry Building from Moneyfacts. but now from an historic a rate.” eroding their savings. December, and raised sure you first have that this can be data as of 25 Januarymost average rates that best 0.25 per cent last “You should make this year to 0.5 ket performance suggests is riskand then buy “Last year, we saw across the savings it again on 3 February although no investment EQUITIES core plate of investmentsthe edge.” around go to record lowsout of the ISA wrap- EYEING UP losing savers money in achieved, per cent. individual shares ISAs or in comparison to that you’ll usually people in a free. example, if you invested in an back With cash However, this pales 30-year high of 5.4 market, within It’s worth noting slowly climbing fi- real terms, it is advisable for “For fees with a the perper, but they are position to coninflation, which hit fund that tracks to pay a few different 2021 and is presays Rachel Springall, comfortable financial ISAs, which give index tracker stock market, on a his- have s ISAs. Th per cent in Decemberthan six per cent up again,” at Moneyfacts. the in- formance of sider stocks and shares nance expert dicted to rise to more2022. steady process them a good chance of outperforming of “It is a slow and rise in during the course left languishing though. There was a base rate in Therefore, any money decrease in value in cash ISAs will
KING CASH IS NO LONGER lifted the base rate
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first a calendar marking the four times in borrowing costs– that’s the consensus since 2004 economists. this year England will since year st of City A.M.’s poll of r rate setter THE BANK of fastest rate hike cycle in foreca nce, a forme on the Andrew Senta adviser to Cambridge embark on to tame rampant inflati ts “three 2004 in a bid g at its meeting of rate and now senior s, said he expecafter today’s exclusive City the UK – startin Econometric this year” – reveals an rises today rate s r per cent by setter furthe rates to 1.25 top economists. hike in 18 A.M. poll of meeting, taking o-back rate and will year. The first back-t the end of theanalysts agree with certainty today Capital Several top years is a near s intent to rapidly shift an Sachs andfour rate g in signal the Bank’ rting the British Sentance. Goldm suppo are both pricin to policy from Economics hout 2022. the pandemic h throug throug economy inflation. set to hikes stamping out, Threadneedle Street is After today
LOUIS GOSS
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Climate noise blocking out real solutions
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nsible for been respo KPMG had ion’s accounts for ng itself auditing Carill decades, earni almost two for its audit work. sions £29m in fees increased the provi of the KPMG has to respond to all up it has saved ntly faces, from £92m curre it s rstands. claim City A.M. unde to £144m,
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ISSUE 3,677
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EARL NICHOLAS its latest announce OFGEM will consumer price the ns of update to with millio cap today, bracing for a s household hike in energ y painful price g. bills this sprin sts at Cornwall Energ y analy ed the cap, warn Insight have what suppliers can s, could which limits default tariff charge for st £2,000 per year. y rise to almo Brearley, the energ ously Jonathan chief, previ watchdog’s mechanism the suggested t soaring should reflec . costs wholesale St is expected to Downing scheme loan £6bn a £200 roll out a providing ehold to this week, every hous rising rebate for blow from soften the prices. ve taxpayers This will involrwriting loans unde effectively liers. supp to for Economic The InstituteMayer told City Affairs’ Andy plans will only A.M. that the al relief for provide partiand will come “at four per cent s at or above household of higher bills for will “remain end of 2022,” around se five years the expen Institute of through to the s inflation target. be three to , p, from the will Bank’ what may is repaid.” Julian Jesso , is betting the Bank double the pricing in a rate rise today Policy . In as the loan unclear whether t out before s Markets are Economic Affairs y at one Monetary been caugh and histor the It is also ng this year defy recent but they have Bank defied expectation s will fall in (MPC) meeti the energ y price with the energ y Committee points, . November, unchanged, triggering s to e, be percentage near futur warning the cap lift rates 0.5 abrupt hawkish tilt will comparison and left rates markets and trade body The Bank’s dampening my in October. volatility in nor Mark Carney’s prioritising rise again suppliers to end.’ Gover r could boyfri driven by it rises across the econo forme for an ‘unreliable to The inability rampant price nding to the pandemic. reputation as st rate and inflation Rishi esale costs whol has respo A.M. on intere of r ellor d cap, City pass by A highe instea e Chanc , due to the mists polled t may agitat ates a one customers s going bust. Most econo will peak at between 6.5 is environmen on and Treasury estimin both would led to dozen think inflati seven per cent in April Sunak. The se es. point increa per cent and anytime soon. percentage blow to the public financ unlikely to cool, developed markets deal a £23bn James Smith said the cost of living ING, at economist
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ARM WRESTLE
BRIT CHIP FIRM TO COME UNDER POLITICAL PRESSURE TO LIST IN LONDON NOT NEW YORK AFTER REGULATORY HURDLES END NVIDIA TAKEOVER PLAN CHARLIE CONCHIE BRITISH chipmaker Arm is set to be the subject of a charm offensive to encourage it to list in London rather than New York. Arm’s Japanese owner Softbank said yesterday it was making preparations to float the Cambridge-based chipmaker after a $40bn (£29.5bn) takeover bid from US giant Nvidia collapsed amid regulatory pressures. Softbank said it was eyeing up New
York as the favoured destination, but political insiders have indicated the government is keen to see the firm go public in London. A Whitehall source said “it shouldn't be a surprise that ministers would like a British success story like Arm to float in London”, while a Treasury spokesperson said it would push ahead with reforms to listing rules to make the capital more attractive to major firms. Arm’s local MP said it was “vital” the
firm listed in the capital. Politicians are reportedly also wooing other soon-tofloat global firms. News of the float came after a bumper takeover bid from US giant Nvidia was finally kiboshed, with a combination of competition watchdog interest and national security concerns too much of a hurdle to overcome. Softbank pushed through a management shakeup at Arm yesterday, with president of the firm’s IP products
division Rene Haas taking over as chief executive from Arm-veteran Simon Segar. Softbank boss Masayoshi Son said: “Rene is the right leader to accelerate Arm’s growth as the company starts making preparations to re-enter the public markets.” Son added that Softbank was aiming to take Arm public before the end of the financial year in March 2023. CONTINUED ON PAGE 3
STATE SET TO BLOAT BY £76BN THURSDAY 10 FEBRUARY
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North Sea gas impact. The Labour Party have been pushing for a one-off levy on energy firms amid spiking household costs. But Looney said “the UK needs more gas, not less gas, right now. That’s going to require more investment, not less investment.” Calls for a tax raid have increased in
BP reported a £9.5bn profit yesterday, its best annual result since 2013
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A PROMINENT former Greenpeace activist and now Stanford University fellow has said “panic” over climate change is blocking debate over the move to a greener future. Danish campaigner Bjorn Lomborg writes in City A.M. today that “fifty years of panic clearly haven’t solved climate change” and that a smarter approach which “focuses on realistic solutions such as adaptation and innovation” is needed. Lomborg’s warning comes the week after McKinsey calculated the cost of moving to net zero by 2050 across the world at a cool $9 trillion a year. The head of the Copenhagen Consensus think-tank called for solutions that emphasise JACK BARN ETT the funding of green energy projects rather than to the gover ECONOMIC politicians “showering growth is the end of nment’s spending spending vital if is bill by the decad subsidies over expensive vanity e. able” levels not to reach “uns state O’Connell The repor ustainprojects.” , experts warn said state scale ing pledg t comes as a raft of A report from ed today. es spend- was envisioned by spending at the The City has become a hub the think budgets haveset out at the last tion Foun the tank Resol datio of green finance in recent two the “unsustainable” and new report vealed a persi n published today u- the state on already put the economy said growing size of years. A global ranking by and the enormstently higher NHS re- level since course to reach its Pursuing was crucial. largest the analysts at Z/Yen put the bill ous cost of tained econa strategy of achieving ing to net The plann 1970s. trans capital at the top of the global omic grow ed 1.25 perce susenue the Britis zero will swell the ition- national hike, th to ntage for the h size tree for the first time in 2021. Treasury raise revtions in the state to historic prop of and dividend on top of corpo point desirable than is more ration nanc The UK government is coming years tax balan orhikes cing the publi ing of incom The cost of and increasingly under fire for c caring for . e tax thres the freez- perts es through further raise the ing population tax hikes, fiBritain’s agesaid. holds, will tax failing to lay out the costs of burd exwill primarily en to the level since ramping up “Avoiding heaviest drive the the transition to ‘net zero’ and relative a period of weak grow to the tune in government spend a John O’Co 1950s. amid ongoing rows about the of nnell, chief economic th cial,” of this decad £76bn a year by the ing the Taxpayers decli price of energy and the rollout state e, taking the end that ’ Alliance, executive of addinthe Resolution Foun ne is crutold “ministers dation said, g that a to the size of electric vehicle facilities. protracted must refus City A.M. sluggishne before the same level as Germof the argument e the perio ss Covid-19 crisis that spen any’s reine ding cann tired has wiped after the financial d of Ramping . d in. £200bn LOMBORG: PAGE 12 ot be ernm crisis zero targe up funding to reach “Instead, they ent’s spend a year off the govts will add should go ing war chest £14bn each net by backing Dan Toml for grow . inson year taxes business and cutti th Foundation said of the Resolution .” ng insur the coming natio ance nal compared increase was “sma to tax hikes ll to come. fry”
They lost billions in 2020, when the pandemic caused prices to plunge. They regained some of this in 2021-22, CHARLIE CONC when economic activity restarted.” HIE Michael Hewson, chief market TECH leade analyst at CMC Markets, described the governme rs have called on the nt calls for a tax as “predictable”. listings rulesto shake up UK British chipmafter the owner RESULTS AND ANALYSIS: PAGE 5 of aker Arm eyeing up said it was for one of a New York floatation Brita in’s most companies exciting . GOCARDLESS GOES UNICORN P3 GREGGS LAUNCHES FASHION RANGE P7 RENTS REACH RECORD HIGHS P8 BRITS FLOCK BACK TO THE OFFICE P10 WINTER OLYMPICS P27
ECONOMISTS and BP’s boss rejected calls yesterday for a windfall tax on energy firms after the energy giant announced healthy profits. The British firm’s chief Bernard Looney said it would be misguided to limit its ability to invest and reduce
2022
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Windfall tax plans rubbished by economists after oil giant’s losses last year Lo ndon must NICHOLAS EARL
BUSINESS NE
WSPAPER COOL RUN GEAR FONRINGS ALL THE AN OVERDU MOUNTAIN BREAK P2 E 0
the week since Shell also revealed chunky profits. BP lost £4.2bn in 2020 amidst a collapse in global demand for oil, similarly to most oil majors. Speaking to City A.M., Andy Mayer from the Institute of Economic Affairs said: “Fossil fuel energy companies have not enjoyed ‘windfall’ profits.
INSIDE LV= AND ROYA
FREE SCRUM DO enjoy sizab WN New Zealand se t to le private eq uity boost
MATT HARD Y result in a stake PRIVATE equity smaller than firm Silver 15 per cent to acquire a the antici stake of aroun Lake is set Lake and NZR pated when Silver cent in intern ational rugbyd five per of last year. held talks in January All Blacks which outfit could see the the The initial deal commercial was said to arm of the rugby been valued valued at £1.5b have team at around £1.5b time and came n at the The deal with n. a year New after acqui Zeala Silver Lake (NZR) would red a stake in City Footb give the Amernd Rugby Group – who minority share all ican firm champions own Premier League be a new commholding in what woulda Manc ercial holdin The deal was hester City. company. g originally the of a player rebell subje According to ion, but if finalis ct would repre Kleinman, the Sky News’ Mark ed sent transaction biggest – privat the latest – and would rugby union e equity move into .
become tech flo at capital as Arm plans to
Arm’s Japan said on Tues ese owner Softb ank day it was take the chipm looking Nasdaq exch aker public on to bid by Ame ange after a takeothe collapsed rican rival Nvidia ver . Russ Shaw London Advo, founder of Tech cates, told the move showed “ther City A.M. e is a lot
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BOSS TAKES
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WEDNESDAY
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MARKETS
CITYAM.COM
MONDAY 11 JULY 2022
CITY DASHBOARD MARKETS ARE ONE STEP AHEAD
They say markets price things in well in advance of them happening. That was clear last week, when they ignored all the upheaval at Number 10. They knew Johnson was done. JACK BARNETT, ECONOMICS AND MARKETS REPORTER
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LONDON REPORT
Week ahead: City looks to new economy data for signs of recession
T
HE CITY will turn its gaze to fresh GDP figures published this week for signs that the UK is already in the teeth of a recession in a busy week of data announcements. London’s premier FTSE 100 index shook off the turmoil in Downing Street to climb 0.38 per cent and finish the week at 7,196.24 points. The domestically-focused mid-cap FTSE 250 index, which is more aligned with the health of the UK economy, jumped 1.48 per cent to end the week at 18,912.95 points. Traders were seemingly mute to ex-Prime Minister Boris Johnson bowing to days of pressure and resigning. They are instead more worried about the UK economy being thrown into reverse by rampant inflation cooling spending and higher interest rates weighing on households and businesses. New GDP data published on Wednesday may spark a downward spiral on the City’s main indexes if it shows the economy contracted in May.
Analysts expect output to have flatlined in the month. Sanjay Raja, senior economist at Deutsche Bank, thinks output jumped 0.1 per cent in May. But, the economy “will [have been] weighed by weaker sentiment, deteriorating export orders, and lower household consumption (particularly for services), as real incomes continue to get squeezed from the unfolding cost of living crisis”. Further hawkish signals from Bank of England governor Andrew Bailey in a Treasury select committee grilling today are likely to dial up expectations for a 50 basis point rise at the central bank’s next meeting on 4 August. “Bottom line: the need for speed is clear,” Raja said. Inflation is running at a 40-year high of 9.1 per cent, but is expected to top 11 per cent in October, more than five times the Bank’s two per cent target. On the corporate front, BT’s c-suite at an AGM on Thursday are likely to face pressure on staff pay after workers earlier this month backed strike action.
BEST OF THE BROKERS
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BARRATT DEVELOPMENTS P
460 455
8 July
456.5
450 445
4 July
5 July
6 July
7 July
8 July
All eyes will be on consumer confidence for the year ahead as homebuilder Barratt reports its full year results on Thursday, brokers at Peel Hunt said. They warned that despite some signs of a potential slowdown in this update, the debate would now focus on 2023, how much sales will slow and how difficult it may become to recover cost price inflation. Shares have plunged 39 per cent this year but Peel Hunt rates the stock as a buy with a target price of 810p.
GAMES WORKSHOP P
7,040
7,100
8 July
7,000 6,900 6,800 6,700
a
4 July
5 July
6 July
7 July
8 July
Wargames-maker Games Workshop is set to be lifted by a number of tailwinds in the year ahead as fewer Covid-19 restrictions and increased manufacturing and distribution capacity reduce freight costs and raise pricing, brokers at Peel Hunt said. The lift will “more than offset” a slower consumer environment, the analysts predicted, particularly as hobbies are “recession resistant”. They rate the stock as buy with a target price of 12,500p.
MONDAY 11 JULY 2022
CITYAM.COM
FTSE 100 7196.24 7.16
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FTSE 250 18912.95 37.42
Price Chg High Low
GILTS Tsy 2.500 24 ...............376.08 Tsy 5.000 25 ................ 107.92 Tsy 4.250 27 .................111.53 Tsy 6.000 28 ................124.12 Tsy 4.125 30 ................362.79 Tsy 4.250 32..................117.98 Tsy 4.250 36 ................ 119.40 Tsy 4.750 38................ 128.54 Tsy 4.250 46 ................128.03
DIVERSIFIED INDUSTRIALS -0.66 -0.30 -0.59 -0.77 -2.79 -1.05 -1.37 -1.65 -2.14
379.4 117.5 124.6 140.4 402.3 138.0 148.0 163.4 175.8
357.2 106.8 109.6 121.5 352.1 114.1 115.9 124.8 123.6
AEROSPACE & DEFENCE
AUTOMOBILES & PARTS
BANKS 0.9 -9.8 -0.1 0.5 -17.6 18.0 -0.7
217.1 567.2 55.1 253.5 638.6 1656.0 218.1
140.6 359.8 41.2 192.2 410.0 901.0 124.2
BEVERAGES Britvic..............................840.5 16.0 1006.0 741.0 Coca-Cola HBC AG.....1846.5 46.5 2784.0 1460.5 Diageo ............................3537.5 19.0 4103.5 3343.0
CHEMICALS 66.010410.0 5908.0 -2.4 158.7 97.2 29.0 3168.0 1721.0 0.2 564.0 222.4 16.0 2706.0 1590.0
CONSTRUCTION & MATERIALS Balfour Beatty ...............265.6 Barratt Devel ................ 456.5 Bellway ..........................2141.0 CRH ................................2923.0 Genuit Group .................390.0 Grafton Group.................767.6 Ibstock..............................165.1 Marshalls.........................454.4 Morgan Sindall Gp.....1866.0 Persimmon ....................1776.5 Taylor Wimpey ...............113.0 Vistry Group...................831.5 Volution ........................... 347.5
270.5 1355.5 2623.0 284.6
ELECTRICITY Contour Global...............253.0 -0.5 257.0 178.0 Drax Gp ............................ 657.5 -14.0 831.5 393.8 SSE ..................................1693.5 -7.5 1920.0 1445.5 Halma ............................ 2144.0 Morgan Advanced ....... 270.0 Oxford Instruments ..1990.0 Renishaw ......................3906.0 Spectris ........................2889.0 XP Power......................2820.0
8.0 3216.0 1876.5 -2.0 412.5 262.5 6.0 2680.0 1760.0 18.0 5565.0 3568.0 38.0 4083.0 2458.0 -30.0 5630.0 2730.0
EQUITY INVESTMENT INSTRUMENTS
Aston Martin..................471.3 45.4 2081.0 393.6 TI Fluid Systems ...........155.4 4.6 323.5 144.0
Croda International . 6894.0 Elementis.........................100.6 Johnson Matt...............1925.5 Synthomer ......................235.0 Victrex .......................... 1849.0
Smith (DS) ..................... 285.0 5.1 462.3 Smiths Gp......................1421.0 5.0 1629.0 Smurfit Kappa Gp......2786.0 67.0 4305.0 Vesuvius.......................... 295.0 1.8 567.0
ELECTRONIC & ELECTRICAL EQUIPMENT
BAE Systems .................809.8 -6.6 838.4 527.2 Chemring Gp ..................324.0 2.0 367.5 256.0 Meggitt ........................... 788.6 1.6 839.2 397.0 QinetiQ .............................374.0 -6.0 380.0 243.0 Rolls-Royce ........................ 87.1 1.9 147.5 78.2 Ultra Electronics ........3492.0 2.0 3492.0 2350.0
Barclays ...........................152.0 HSBC Hldgs.....................525.8 Lloyds Banking ................42.2 NatWest Group..............218.8 Standard Chartered.....579.4 TBC Bank Group..........1232.0 Virgin Money UK ...........135.3
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Price Chg High Low
5.8 319.0 215.6 -0.6 760.0 448.5 -15.0 3526.0 2070.0 70.0 4002.0 2756.5 6.5 801.0 375.0 25.8 1412.0 715.0 3.6 239.2 154.0 5.0 845.0 436.2 22.0 2685.0 1776.0 4.0 3018.0 1772.5 -1.9 182.9 113.0 18.0 1261.5 760.5 2.0 560.0 336.5
3i Infrastructure............337.5 Aberforth Smlr Cos ...1180.0 Alliance Trust.................939.0 Allianz Tech ....................221.0 AVI Global Trust............ 181.6 Baillie Gifford Japan.... 727.0 Baillie Gifford US ..........165.6 Bankers InvTst ..............101.0 Bellevue Healthcare.....164.6 BlackRock Smaller .....1318.0 BlackRock Wld Mining565.0 BR Throgmorton ..........558.0 Caledonia Inv ..............3455.0 Chrysalis Inv .................. 103.6 City of London IT..........401.5 Edin Inv Trust ...............594.0 Edin Wwide .....................187.2 European Opp ............... 669.0 F&C Investment ............832.0 Fidelity China SPE ........ 277.5 Fidelity Emg ...................639.0 Fidelity Eur .................... 285.0 Fidelity Spec Val ...........263.5 Finsbury G&I Tst.......... 786.0 GCP Infra Inv.................108.0 Global Smaller ................141.2 Greencoat UK................. 151.0 Harbourvest Glb........ 2090.0 Henderson Sml Co ........810.0 Herald Inv Trust ..........1614.0 HICL Infr ......................... 169.4 Hipgnosis Songs Fund .108.0 ICG Enterprise .............1100.0 IMPAX ENVIRO MKTS418.0 JPM American...............714.0 JPM Emerg Mkt .............107.2 JPM Euro Disc. ............. 389.0
4.5 366.5 302.0 0.0 1612.0 1162.0 -1.0 1078.0 887.0 2.0 370.0 200.0 0.2 222.0 172.0 2.0 1106.0 662.0 2.4 356.0 146.0 -0.6 125.0 95.5 0.4 208.0 132.4 2.0 2220.0 1254.0 -6.0 792.0 502.0 -1.0 1042.0 533.0 15.0 4100.0 3160.0 6.7 277.0 90.0 0.5 425.0 377.0 2.0 657.0 578.0 1.2 348.5 160.8 -9.0 891.0 644.0 0.0 946.0 770.0 -7.5 400.5 218.5 2.0 914.0 605.5 -0.5 345.0 267.5 1.0 315.0 256.0 -4.0 930.0 734.0 -0.6 118.6 100.2 0.4 177.0 138.0 -1.6 159.9 129.6 -10.0 2940.0 2005.0 -6.0 1370.0 778.0 -16.0 2630.0 1560.0 -5.0 183.0 161.0 -0.2 129.2 102.6 -12.0 1314.0 954.0 5.0 583.0 381.5 4.0 782.0 654.0 -1.2 139.0 99.8 9.0 582.0 366.5
FTSE ALL SHARE 3961.27 4.29
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Price Chg High Low JPM Japan IT ................451.5 3.5 729.0 412.5 Jupiter Fund Mngt ....... 142.4 1.3 298.2 135.2 Law Debenture ..............756.0 -4.0 830.0 724.0 Mercantile IT .................180.2 0.0 291.0 173.8 Monks Inv Tst ................981.0 4.0 1472.0 888.0 Murray Inc Tst.............. 824.0 -5.0 952.0 770.0 Murray Intl Tst ........... 1222.0 -8.0 1320.0 1076.0 Ninety One ......................198.6 1.9 277.4 190.1 Pantheon Intl Partn ......247.5 -2.5 351.0 240.5 Pershing Square........ 2500.0 50.0 3115.0 2330.0 Personal Assets Tst....48100.0 -200.050900.047350.0 Polar Cap Tech Tst .....1960.0 18.0 2750.0 1778.0 Renewables Infra Gp ...135.0 -1.0 139.4 123.2 RIT Cap Partners.......2450.0 5.0 2765.0 2250.0 Schroder Asia ................521.0 -4.0 617.0 498.0 Schroder Oriental .........255.5 0.5 276.5 251.5 Scot American Inv ......468.5 -6.5 543.0 442.5 Scottish Mortgage .......792.4 -9.0 1543.5 670.6 Sequoia Econ Infra .........87.4 -1.7 114.6 87.4 Smithson Inv................1261.0 17.0 2025.0 1140.0 Syncona ...........................198.0 -3.5 222.0 157.2 Temple Bar......................210.5 -3.5 254.4 201.6 Templeton Em Mkts .....148.4 -1.0 197.6 140.6 Vietnam Enterprise ......641.0 0.0 791.0 641.0 VinaCapital Vietna .......477.0 -4.0 545.0 438.0 Witan Invest ...................211.5 0.5 257.0 202.0 Wwide Healthcare .... 3245.0 -10.0 3845.0 2825.0
FIXED LINE TELECOMMUNICATIONS BT Gp .................................193.4 2.6 200.9 135.2 Telecom Plus ...............2020.0 10.0 2020.0 1010.0
FOOD & DRUG RETAILERS Greggs ............................1943.0 20.0 3416.0 1808.0 Ocado Gp .........................867.0 15.6 2090.0 727.8 Sainsbury(J)...................216.9 3.0 340.0 203.3 SSP Group...................... 238.0 2.2 303.2 207.8 Tesco.................................261.8 4.7 303.4 229.7
FOOD PRODUCERS Assoc British Foods... 1590.5 Cranswick ....................3046.0 Greencore Gp ...................96.5 Hilton Food Gp ..............985.0 Premier Foods................108.8 Tate & Lyle ......................773.0 Unilever.........................3836.0
17.0 2131.0 1526.5 14.0 4148.0 2918.0 0.1 146.6 95.8 -6.0 1250.0 985.0 -0.4 126.8 98.3 -0.8 906.5 733.5 10.5 4358.0 3328.0
FORESTRY & PAPER Mondi ............................1480.0 10.5 2068.0 1309.0
GENERAL FINANCIAL 3i Group .........................1158.0 6.0 1503.5 1059.0 Ashmore Gp.................... 211.6 3.2 410.0 207.6 Brewin Dolphin .............509.0 0.0 517.0 266.0 Bridgepoint Group........218.6 -4.4 569.0 216.0 Capital Gearing ..........4950.0 -30.0 5180.0 4905.0 Close Brothers .............1023.0 -13.0 1602.0 987.0
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RISERS % Aston Martin ...............................471.30 10.7 Chrysalis Inv................................103.60 6.9 Tullow Oil .......................................43.90 4.5 Price CMC Markets ................280.0 Coats Group......................63.0 Hargreaves Lans............814.6 IG Gp.................................693.0 Integrafin Holdings...... 227.2 Intermediate Cap .......1355.0 Intl Public Prtnshps .....162.0 Investec ...........................418.9 IP Group .............................71.7 JTC ................................... 624.0 Liontrust......................... 922.0 London Stock Exch .....7612.0 Man Group ......................249.7 OSB Group ......................479.2 Paragon............................479.2 Petershill Partners .......218.0 Plus500 ........................1548.0 Provident Financial ......196.9 Quilter ..............................100.5 Rathbone Grp...............1914.0 Ruffer Investment....... 302.5 Schroders.....................2730.0 SDCL Energy ................... 117.6 TP ICAP ...........................105.5
Chg High Low 3.5 468.0 219.5 0.0 81.4 58.2 6.2 1677.0 762.6 9.5 945.0 648.0 4.8 602.0 213.0 -10.5 2379.0 1284.5 -0.2 174.8 156.0 -8.3 536.8 270.5 -0.1 155.2 66.7 26.0 936.0 571.0 8.0 2485.0 863.0 30.0 8504.0 6370.0 -0.5 259.6 178.8 0.2 599.0 418.8 2.4 617.5 427.2 2.5 350.7 194.8 -12.0 1673.0 1255.5 3.6 381.6 189.0 2.0 197.1 96.4 -6.0 2210.0 1518.0 -0.5 325.0 230.0 28.0 3871.0 2578.0 0.0 124.0 97.8 -0.5 208.2 103.5
GENERAL RETAILERS B&M..................................383.3 Currys................................. 72.5 Dunelm Gp......................809.0 Frasers Group ...............698.0 Howden Joinery Gp......612.8 Inchcape..........................709.5 JD Sports Fashion ........125.0 Kingfisher....................... 250.7 Marks & Spencer ..........134.3 Moonpig..........................208.2 Next ...............................6282.0 Pets at Home Gp .......... 289.8 Vivo Energy ....................150.0 Watches of Switz .........760.0 WH Smith.....................1406.0
6.3 644.0 355.8 -1.0 141.6 66.5 -5.5 1521.0 776.5 10.0 813.5 562.5 6.6 975.6 581.4 -2.5 933.0 647.0 2.7 234.0 102.9 2.1 375.5 234.8 -4.4 256.9 131.6 -3.4 424.6 190.6 110.0 8426.0 5764.0 -2.6 519.0 278.0 1.0 150.0 100.6 -40.0 1518.0 750.0 20.0 1805.5 1311.0
HEALTH CARE EQUIPMENT & SERVICES Convatec..........................221.0 0.0 262.6 166.8 Mediclinic Intl ...............471.0 -5.2 476.2 275.8 Smith & Neph...............1135.5 3.0 1566.5 1120.5 Spire Health ................... 237.0 4.0 254.5 206.0
HOUSEHOLD GOODS Berkeley Grp Hldgs ...3825.0 Countryside ....................241.0 Crest Nicholson ............ 236.8 Reckitt Benckiser ......6246.0 Redrow.............................483.2
26.0 4943.0 3670.0 5.4 571.5 225.8 -1.2 424.2 233.0 -4.0 6489.0 5391.0 -3.4 718.8 470.4
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FALLERS
Watches of Switz ....................... 760.00 Marks & Spencer ........................134.30 Standard Chartered ...................579.40
Price Chg High Low
INDUSTRIAL ENGINEERING
INDUSTRIAL METALS Evraz ...................................81.0 0.0 646.2 53.1 Ferrexpo ..........................120.4 -2.0 495.2 116.0
INDUSTRIAL TRANSPORTATION Clarkson........................2885.0 -55.0 4180.0 2835.0 Redde Northgate ..........341.5 7.5 443.0 334.0 Royal Mail .......................273.7 0.9 574.8 267.7
LEISURE GOODS Games Workshp .........7040.0 20.012220.0 6005.0
LIFE INSURANCE abrdn .................................163.7 2.7 299.0 148.9 Aviva .................................401.3 3.0 602.9 382.3 Just Group .........................67.8 1.1 106.0 65.7 Legal & General.............244.3 2.2 307.8 233.2 Phoenix Gp.....................596.0 11.0 701.4 568.2 Prudential .....................1016.5 -9.0 1553.5 881.0 St James Place ............1144.0 27.5 1731.5 1054.0
MEDIA -5.0 3170.0 2240.0 6.2 454.4 253.8 7.8 741.8 499.5 2.0 1416.0 829.0 43.0 3910.0 1551.0 4.4 624.0 464.4 1.8 125.8 63.2 0.8 270.6 167.0 16.4 869.4 571.8 -8.0 2449.0 2025.0 6.4 800.4 531.0 16.0 1224.0 761.6
MINING Anglo American .........2824.5 Antofagasta ..................1113.0 BHP Group ...................2205.5 Centamin ...........................80.4 Endeavour Mining.......1678.0 Fresnillo ...........................683.2 Glencore .......................... 431.4 Hochschild Mining ..........83.3 Rio Tinto .......................4835.0
8.5 4170.5 -3.5 1781.5 -43.0 3019.0 0.7 109.8 11.0 2100.0 9.2 986.8 -1.9 541.5 -0.3 173.4 -25.0 6292.0
Price Chg High Low
MOBILE TELECOMMUNICATIONS
Bodycote .........................527.0 4.5 984.5 500.0 Hill & Smith .................1202.0 22.0 1902.0 1110.0 IMI ..................................1214.0 7.0 1838.0 1150.0 Melrose Ind ....................155.8 1.2 190.8 107.6 RHI Magnesita ............1938.0 39.0 4262.0 1823.0 Rotork ..............................243.0 3.0 373.4 233.8 Spirax-Sarco..............10725.0 15.0 17135.0 9130.0 Weir Gp..........................1431.0 1.5 1916.5 1363.0
4imprint........................ 2410.0 Ascential .........................291.0 Auto Trader Gp............. 592.0 Euromny Inst Inv....... 1342.0 Future ............................ 1855.0 Informa............................543.2 ITV .......................................67.9 Moneysupermkt.com ... 183.9 Pearson ............................776.6 RELX ..............................2242.0 Rightmove Group ..........603.6 WPP .................................800.6
% -5.0 -3.2 -2.9
2470.5 1019.5 1835.2 75.8 1510.0 622.4 296.2 79.9 4375.5
Vodafone Gp ...................128.5
1.0 139.5 106.9
NONLIFE INSURANCE Admiral Gp...................2335.0 14.0 3688.0 2103.0 Beazley............................500.5 12.7 504.0 343.4 Direct Line Ins ...............243.6 3.1 316.4 231.4 Hiscox ...............................943.4 0.2 990.2 792.8 Lancashire Hldgs...........413.0 9.8 675.5 346.6
OIL & GAS PRODUCERS BP ..................................... 386.6 1.3 451.4 278.4 Capricorn Energy.......... 219.8 3.8 229.8 125.6 Energean ........................998.0 27.5 1391.0 620.0 Harbour Energy .............325.7 6.7 530.0 298.5 Shell ...............................2043.5 10.0 2440.0 1833.4 Tullow Oil............................43.9 1.9 62.2 39.7
OIL EQUIPMENT & SERVICES Wood Gp(J) ....................156.0
3.1 256.5 142.6
PERSONAL GOODS Burberry Gp..................1639.5 10.5 2182.0 1482.0 PZ Cussons......................201.0 -4.0 263.5 182.8
PHARMACEUTICALS & BIOTECHNOLOGY AstraZeneca ..............11044.0 Dechra Pharma...........3750.0 Genus............................ 2608.0 GSK .................................1754.8 Hikma Pharma ............. 1697.0 Indivior ...........................308.6 Oxford Biomedica .........493.0
40.011054.0 8063.0 -6.0 5405.0 3110.0 -52.0 6070.0 2234.0 -36.6 1810.4 1380.4 -20.0 2690.0 1482.0 -3.8 336.8 148.1 6.5 1634.0 415.0
REAL ESTATE Assura ................................66.5 Big Yellow Gp ............... 1327.0 British Land ....................467.3 Captl & Count Prop ...... 149.6 CLS Hldgs ........................201.0 Derwent London ........2722.0 Grainger.......................... 285.0 Grt Portland Est .............737.0 Hammerson ......................20.5 Land Securities.............685.0 LondonMetric Prop ......235.8 Primary Hlth Prop .........139.1 Safestore Hldgs ..........1068.0 Savills ............................1060.0 SEGRO ...........................1005.0 Shaftesbury....................527.0 TR Property IT .............. 367.0 Tritax Big Box ................184.5 Tritax Eurobox .................86.2 UK Commercial Prop ......74.6 Unite Group ...................1113.0 Urban Logistics .............158.0 Workspace Gp ...............551.5
0.0 79.8 59.6 6.0 1724.0 1200.0 2.3 556.4 441.7 4.6 179.3 138.4 -1.5 262.0 185.2 -4.0 3802.0 2570.0 2.6 335.0 269.8 0.0 803.5 700.5 0.3 39.9 19.0 3.6 813.2 643.6 0.0 285.2 225.6 1.6 169.6 131.1 -4.0 1418.0 1008.0 3.0 1450.0 975.5 3.0 1436.5 950.6 -5.0 662.0 515.0 -1.5 510.0 354.5 -0.6 249.0 178.5 -1.0 124.0 84.4 -0.5 93.4 72.4 7.0 1237.0 990.2 -2.0 199.0 118.5 -1.0 971.0 538.5
£
/€ 1.1820 /$ 1.2031 /¥ 163.85
à à Ã
0.0013
0.7040 €/¥ 138.61
SOFTWARE & COMPUTER SERVICES 5.0 1642.0 788.0 -2.8 645.4 474.0 16.0 4220.0 1924.0 -1.4 255.0 99.8 -2.0 3030.0 2268.0 10.0 1362.0 830.0 5.0 2084.0 954.5 5.1 466.1 256.3 -1.2 335.0 167.4 0.0 770.0 351.0 10.8 853.8 595.6 -8.0 2240.0 1253.0 0.4 460.0 79.1
SUPPORT SERVICES Ashtead Gp ..................3828.0 Babcock Intl Grp........... 313.0 Biffa .................................360.8 Bunzl ...............................2857.0 DCC ................................5266.0 Diploma.........................2366.0 discoverIE Gp................ 629.0 Essentra...........................251.5 Experian .......................2603.0 Ferguson ...................... 9280.0 Hays ...................................116.9 Homeserve ....................1169.0 Intertek Gp..................4255.0 IWG...................................190.0 MITIE GROUP..................59.2 Network Int.................... 190.1 Pagegroup.......................421.8 Rentokil Initial...............497.0 RS Group .........................903.5 Sanne Group..................906.0 Serco .................................174.7 Travis Perkins.................983.2
106.0 6450.0 3359.0 0.2 380.2 255.9 -9.2 416.0 283.0 11.0 3163.0 2397.0 52.0 6486.0 4889.0 40.0 3460.0 2158.0 -18.0 1262.0 608.0 2.0 357.0 243.5 -10.0 3667.0 2285.0 40.013305.0 8680.0 0.1 175.4 109.0 -1.0 1174.0 608.5 -36.0 5782.0 4188.0 -1.4 328.0 181.8 1.2 77.3 46.5 -2.1 394.4 171.8 2.4 680.5 386.0 -0.3 636.2 444.5 8.0 1255.0 812.0 0.0 946.0 822.0 0.1 183.8 121.2 10.6 1830.0 941.4
TECHNOLOGY HARDWARE & EQUIPMENT Spirent Comms..............246.6 -0.6 300.2 215.4
TOBACCO Br Am Tob .................... 3383.0 Imperial Brands ..........1815.5
3.5 3628.0 2512.5 5.5 1882.0 1486.0
TRAVEL & LEISURE 888 Holdings..................159.2 Carnival...........................690.0 Compass Gp..................1760.0 Dominos Pizza............... 288.4 easyJet ............................376.4 Entain .............................1097.0 FirstGroup.......................126.0 Flutter Ent....................8122.0 Intercontl Htls .............4513.0 Intl Cons Airl...................110.1
€/$ 1.0178
0.0035 €/£ 0.8460
Price Chg High Low
Auction Tech ..................933.0 Avast.................................503.2 Aveva Gp.......................2358.0 Baltic Classifieds........... 124.4 Computacenter........... 2418.0 FDM Group......................879.0 Kainos Gp ......................1169.0 Micro Focus Intl ............283.0 NCC Grp ...........................189.4 Playtech ...........................542.5 Sage Group .....................663.2 Softcat ...........................1323.0 Trustpilot.........................100.9
MARKETS
-1.8 478.0 159.2 8.6 1766.4 619.6 9.0 1820.5 1407.5 2.8 465.2 272.6 3.9 899.6 345.5 0.5 2377.0 1096.5 -1.4 139.5 73.6 32.015890.0 7922.0 63.0 5338.0 4193.0 0.8 188.0 102.9
Price Mitchells & Butlers .......177.9 National Express ...........180.0 Rank Gp .............................86.5 TUI AG .............................136.3 Wetherspoon (JD) ........616.5 Whitbread....................2544.0 Wizz Air Holdings ...... 1858.5
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13
0.0018 0.0009 0.4390
Chg High Low -4.8 295.0 177.9 0.3 284.2 178.7 1.5 183.2 79.5 5.1 352.2 127.5 5.0 1167.0 605.5 22.0 3438.0 2431.0 51.5 5398.0 1695.0
AIM 50 Abcam ........................... 1226.0 Advanced Medical .......286.0 Alliance Pharma............. 117.6 ASOS..............................1005.0 Camellia .........................6175.0 Caretech Holdings ........742.0 Central Asia Metals .....221.5 CVS Group.....................1629.0 Dart Group .....................806.6 Diversified Energy .........110.5 EMIS Group .................1860.0 FD Technologies ......... 2135.0 Fevertree Drinks ........1296.0 Frontier Devs............... 1464.0 Gamma Comms ........... 1110.0 GB Group ........................ 438.6 Gooch & Housego ........906.0 Hurricane Energy.............. 6.8 Impax Asset Mgmt ......578.0 Iomart Group .................168.4 IQE.......................................36.5 James Halstead ............200.0 Johnson Service Gp .......99.9 Keywords Studios .....2300.0 Learning Tech Gp ..........120.6 M&C Saatchi ..................150.0 M.P. Evans ......................864.0 Majestic Wine.................167.3 Midwich Group .............590.0 Molten Ventures ...........412.8 Mortgage Advice B .....840.0 Next Fifteen Comm .....944.0 Nichols...........................1200.0 Numis Corporation ...... 266.0 Polar Capital Hdgs........476.0 Purplebricks Gp................14.8 Renew Holdings............660.0 RWS Holdings ................349.4 Secure Income REIT ...461.0 Serica Energy................300.0 Smart Metering Sys.... 855.0 Telford Homes................349.5 Thorpe (F.W.)..................376.5 Watkin Jones .................215.5 Young’s Brew NV...........744.0 Young’s Brew-A............1144.0
-17.0 1750.0 1049.0 -4.0 341.0 256.5 1.4 121.6 96.4 22.5 4755.0 783.5 25.0 6925.0 5850.0 0.0 747.0 530.0 7.5 284.0 200.5 -3.0 2770.0 1549.0 22.8 1423.0 783.8 -0.9 128.8 97.7 2.0 1890.0 1136.0 45.0 2500.0 1378.0 12.0 2812.0 1212.0 -10.0 2840.0 1078.0 28.0 2335.0 1026.0 9.2 952.5 386.2 6.0 1485.0 816.0 0.0 11.7 2.1 6.0 1482.0 555.0 0.2 265.5 140.0 0.6 53.3 28.2 -1.0 580.0 196.0 1.3 173.4 97.7 32.0 3302.0 1952.0 2.8 235.8 107.1 -3.6 216.0 125.0 6.0 1085.0 672.0 -4.7 879.0 152.1 0.0 700.0 494.0 -1.0 1180.0 392.2 -12.0 1500.0 840.0 9.0 1458.0 874.0 -5.0 1540.0 1105.0 12.5 383.0 230.0 -4.0 902.0 476.0 0.7 75.0 14.1 9.0 872.0 594.0 7.8 678.5 331.8 0.0 480.0 382.5 10.0 418.5 144.0 9.0 1030.0 688.0 0.0 349.5 349.5 -10.5 520.0 371.0 0.5 276.5 205.5 -6.0 982.0 648.0 -14.0 1660.0 1120.0
14
OPINION
MONDAY 11 JULY 2022
CITYAM.COM
OPINION EDITED BY SASCHA O’SULLIVAN
A fresh face in No10 should find some policy rather than campaign slogans Eliot Wilson
I
T IS now received wisdom that modern politics is about personality rather than policy. We are, apparently, in a post-ideological phase where the priority is a leader connecting with the electorate and seeming authentic. How else are we to explain the rise to power of Boris Johnson, a P.G. Wodehouse caricature who was always content with an overhead locker when it came to ideological baggage? However attractive this theory is, it’s not true. Policy still matters. That, after all, is the business of running schools, hospitals, housing, the emergency services and everything else which touches on voters’ everyday lives. We may be less comfortable talking in philosophical terms now than we were in the 1970s or 1980s, but we have simply found a different language to express the same concepts. By the autumn, at the latest, we will have a new prime minister. What changes might we expect him or her to make? What policies will be pushed to the foreground, and what might quietly be airbrushed out of history? How much elbow room will a new Conservative leader have, and what would be most effective in signalling a fresh start, drawing a line under the Johnson years?
Sajid Javid and Rishi Sunak are both running for Conservative party leader We can look at this on a micro or macro level. In terms of the former, we might expect the brakes to be applied to the privatisation of Channel 4, for example. This is a project driven partly by dogma—private sector good, public sector bad—and partly by antipathy: the channel makes no secret of its broadly progressive stance and often offers a platform to those who dislike or oppose the current government. The new prime minister might think abandoning it a useful olive branch to the centre ground; it will raise a paltry sum of money and is likely to hobble, rather than empower, Channel 4 in the television market.
By contrast, some early, high-profile tax reductions would be a strong signal that coherent conservatism was back in charge. Johnson was
Some high-profile tax cuts would signal that coherent conservatism was back in charge
never a committed small-state conservative, happy to open the taps of public spending for electoral gain, and the right wing of the party has been chafing at this. Revising business rates or, more boldly, cutting income tax would reassure pro-business voters that controlling expenditure was back on the agenda. There are broader issues too. Most obvious is the so-called “culture war”, which some members of the government have been cheerfully stoking for some time. There are important discussions to be had, but it is not the place of government ministers to berate banks for specifying their employees’ pronouns, or attacking signage in
The City needs certainty our global outlook will continue in spite of high political drama
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OLITICAL turmoil and division have dominated the news agenda on both sides of the Atlantic, albeit for different reasons. And with the changes at the top of British politics, it is vital that government continues investing in London’s infrastructure, promoting innovation, and developing the UK’s status as a leading financial centre. Our financial and professional services sector needs a stable government to stay competitive on the world stage. These businesses contribute over £75bn in tax annually and support the UK economy by creating jobs, encouraging investment, and facilitating trade. And they support the government’s levelling up agenda by employing 2.3 million people across the country two thirds of which are outside of London. The competitiveness of the industry is a critical national interest. And we stand ready to work with whoever leads the next government to support
Vincent Keaveny
a vibrant and thriving City, a diverse and sustainable London, and a globally-successful UK. We must also not lose sight of the aims of cultivating a “global Britain” as we strengthen the economic relationship between the UK and the US. This will help driving forward our recoveries amid surging inflation and the cost-ofliving crisis. It must continue to be a part of our international outlook, whoever has the keys to No10. The US is our largest trading partner and a natural ally when it comes to fintech and innovation. I’m going across the pond this week to relay exactly this message. When it comes to the “special’ relationship”, there has been much
speculation on whether there will be a UK-US free trade agreement. A deal would boost the economies of both countries. And recent agreements with Australia, New Zealand, and Japan, have given us a glimpse of what could be achieved. But the greater scale of UKUS services trade means the impact would be much more dramatic. Yet while officials from both countries insist that the idea of a trade deal is not “dead”, no one expects an agreement any time soon. But there are many other areas of opportunity for cooperation, with or without a free trade deal. There is already such a great flow of people, ideas, business, and money, between the UK and US. And we need to do everything possible to facilitate the flow of data, boost digital trade, and expand regulatory cooperation. Given our status as global financial centres, we have the opportunity as well as the responsibility to provide leadership in green finance, sustainable investment, and the transition to net zero.
I am also travelling to Canada, to promote our financial and professional services deeper into North America. Canada is another key partner with which the UK is negotiating a new free trade deal to build on the existing postBrexit trade continuity agreement. Whether I’m in Montreal or New York, I will make the case not just for the UK as a place to invest, but as a place to manage investments. The UK is a pioneer in sustainable and responsible investing - something which is becoming ever more important, and where our leadership is vital. With all major economies facing challenges, this is a time for us to be bringing down barriers to trade and reducing the costs of doing business.---By focusing on our strong economic relationships and working with our partners across the Atlantic, we can lead financial and professional services to a future which is more innovative, sustainable, and responsible. £ Vincent Keaveny is the mayor of the City of London Corporation
National Trust properties. How we live with each other and with our past needs much more light and a good deal less heat. A new premiership might also be an opportunity to revisit the UK’s new asylum arrangements with Rwanda. This has been a bitterly divisive policy, almost designed to stoke the law-andorder base and enrage centrists and liberals: more importantly, it is not clear that it is either legal or workable. A fresh start might allow the government to “review” this area, and look to more practical ways of controlling illegal immigration at source. The problem will only be effectively addressed by tackling access to boats and fuel, and working closely with allies to police coastal waters effectively. It is no secret relations between Boris Johnson and his counterpart in Paris were tense. A fresh face could help mend some of these old disagreements. Any prime minister who succeeds a leader of the same party has a difficult balance to strike. It is impossible to repudiate everything that has gone before, but a newcomer will want to signal a change of emphasis. So it was with John Major after Margaret Thatcher and Gordon Brown after Tony Blair. The key to success is understanding that detailed policy and overall narrative must be tackled together, for each feeds the other. We await the autumn to see how the new prime minister presents themself to the world. £ Eliot Wilson is co-founder of Pivot Point and a columnist with City A.M.
THE ONLY ONE NOT RUNNING? (One of) the former Health Secretaries, Matt Hancock might be the only Tory MP not jostling for a leadership bid. Some estimates have suggested that as many as a dozen MPs may eventually put their name forward for Prime Minister.
CITYAM.COM
MONDAY 11 JULY 2022
WE WANT TO HEAR YOUR VIEWS
LETTERS TO THE EDITOR Political turmoil must be swift [Re: Them’s the breaks’: Defiant Boris Johnson resigns as Prime Minister, yesterday] The uncertainty around who will replace the prime minister goes hand in hand with the uncertainty facing British businesses, including rising startups. The government’s disruption is selfinflicted, but the disruption caused to Britain’s early-stage funding market has been entirely inflicted upon startups. The new leader of the Conservative party has an opportunity to immediately put the government squarely behind early-stage startups. The timing cannot be better, following the Treasury Committee’s inquiry into the UK’s Venture Capital industry in
June, which will help support the innovative businesses here in the UK. Firstly, the next leader must act urgently to remove the Enterprise Investment Scheme (EIS) sunset clause, which is preventing would-be investors from making commitments they would want to make. Secondly, they could double the Seed Enterprise Investment Scheme (SEIS) funding cap to allow new startups the capital needed to launch and be competitive in the global market. The pressure on our early-stage funding market was growing before the pandemic and long before rising inflation began compounding problems for startups and investors alike. These are two simple changes that could unlock the pressure that is currently suffocating Britain’s innovation funnel. Stephen Page
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enter the private sector, only to be engulfed in the Greensill lobbying scandal during the pandemic. Trying to exploit his political connections for private gain didn’t take him very far. Gordon Brown has largely kept out of national politics, taking on international roles such as “Ambassador for Global Health Funding” at the WHO. Tony Blair has gone on to create his own foundation, influencing policy from outside of politics. The possibilities are endless, it seems.
Certified Distribution from 4/4/2022 till 29/4/2022 is 81,713
Florin Vasvari
Editorial Editor Andy Silvester | News Editor Ben Lucas Comment & Features Editor Sascha O’Sullivan Lifestyle Editor Steve Dinneen | Sports Editor Frank Dalleres Creative Director Billy Breton | Digital Editor Michiel Willems Commercial Sales Director Jeremy Slattery
EXPLAINER-IN-BRIEF: LIFE AFTER NO10 FROM LOBBYING TO SPEAKING TOURS Boris Johnson might have been forced to make his exit from No10 - but it looks like he has no intention of making an exit from politics. There are suggestions he will stay on as an MP. Theresa May, the predecessor whom he helped take down, has also remained an MP. On the side, however, she’s making a considerable amount of money delivering speeches all over the world - some of which have been reported to be as lucrative as £136,000. David Cameron left politics to
Inflation has hurt public companies, but even private tech firms will feel the pain
mitments. Fund managers will be tempted to hold onto portfolio companies for longer, and if exits through M&A or IPOs are necessary, they will come at much lower valuations. According to Bain Consulting, about 50 per cent of the median value creation by fund managers over the last decade came from multiple expansion. Such expansion was triggered by low interest rates that increased asset multiples. That has now stopped. Buyout funds should be less sensitive to rising discount rates than venture capital portfolios. But most buyout transactions are still financed with a floating-rate debt, meaning firms will need to cover increasing interest payments while earnings are under pressure. As interest rates rise, defaults could accelerate. And unlike in the global financial crisis, when commercial banks were reluctant to intervene, private debt and other institutional funds are more likely to enforce their debt contracts. Meanwhile, buyout fund managers
The Durham Miners’ Gala returned to the streets this year after a two-year pandemic hiatus, but old feelings do not appear to have softened with time. Keir Starmer was not asked to speak, but RMT leader Mick Lynch was the star attraction for the thousands in attendance.
15
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UBLIC market companies particularly those in the tech sector - have felt the impact of soaring inflation, as central banks continue to pump interest rates higher. The tech-heavy Nasdaq is down 30 per cent this year and private market companies will inevitably catch up. A good benchmark to follow is often the valuations of venture or buyout backed companies. According to Pitchbook, venture backed IPOs are down 52 per cent while buyout backed IPOs are down by 32 per cent - this is a steeper fall even than the S&P 500 since the beginning of the year. It’s not a reassuring picture. When companies gain most of their value from revenues and earnings forecasted far into the future, their valuations are highly sensitive to increases in discount rates and changes in implied growth rates. Downward revisions, then, are a certainty. Over the past two years, there has been a huge surge in valuations on the back of a bull market, driven by an injection of pandemic-era state subsidies. Global venture investment reached an alltime high of $634bn last year, so we have a long way to fall. So far, down rounds have been few and far between: in the first quarter of 2022 only 5 per cent of completed rounds have come in at a lower valuation than when companies last raised capital. However, we’re starting to see signs of more down rounds to come. Klarna, which became Europe’s most valued startup last March, laid off 10 per cent of its staff and is now raising a down round at a third of its previous valuation. SumUp recently raised €590m on an €8bn valuation last week, less than half of the valuation that was expected according to reports in February this year. Inflation is also likely to lead to some contraction in fundraising. As capital becomes more expensive, investors will be more picky and take longer over due diligence. When portfolio companies’ valuations finally adjust, some limited partners might find themselves overallocated to alternative assets and thus in need to cut down their exposure to private funds. Distributions from funds will also likely slow down, limiting what capital investors have available for new com-
KINDER, GENTLER POLITICS Durham Miners’ Gala sees the old tunes played
OPINION
Klarna laid off 10 per cent of its staff have been increasingly finding their way into tech deals before they reached public markets. The likes of KKR (Zwift), Blackstone (recently backed SumUp) and Tiger Global (MoonPay and Checkout.com) have invested heavily in some of the fastestgrowing tech companies and have also raised dedicated venture capital funds. Many still doubt the ability of private equity houses to grow businesses. But specialist knowledge needed was brought in via whole teams of tech investors. For example KKR’s tech growth fund team has been packed with professionals from Salesforce Ventures or Silver Lake. As a result, private equity’s role in the midst of this market adjustment could turn out to be crucial. The commitment (and capital) of venture and buyout fund managers could just take the edge off the violent adjustment experienced by stocks in the public markets. £ Florin Vasvari is an academic director at the London Business School
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16
LIFE&STYLE
CITYAM.COM
MONDAY 11 JULY 2022
TRAVEL A cruise to the Norwegian Fjords is a journey through time, says wannabe Victorian gentleman Daniel Edward
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t heart, I am a Victorian explorer. A century-and-a-bit late, I often find myself seeking out the new frontiers of my spirit era, so a week-long cruise from Amsterdam to the Norwegian fjords onboard Holland America Line’s new flagship, Rotterdam, is just the ticket. Gliding serenely between steep cathedrals of towering rock to the soundtrack of countless foamy-white waterfalls is a mesmerising, almost hypnotic, experience. The Rotterdam, with her smart dark blue hull, is the seventh ship to honour the Dutch maritime city. Back in the day, the original Rotterdam was part of a fleet that transported 18 million European immigrants across the Atlantic in search of a better life in the New World. Today’s ship offers new adventures in exquisite comfort and nowadays it’s just as common for Americans to dream of European treasures as it is the other way round. But while I may be a wannabe Victorian, I’m far from old-fashioned and the Rotterdam is decidedly 21st century. The wide selection of bands on “Music Walk” – a collection of stages on Deck 2 – perform at the kind of volumes music begs to be played at. There’s classical, rock, piano bar, New Orleans jazz and soul – a music festival with no muddy boots or tents… Facial glitter is still an option. Away from the dancefloors, the spread of restaurants puts my local high street to shame and my taste buds travel as far as South Asia and as local as freshly caught Norwegian fish. It was the Norwegian fish that first brought the Victorians to Eidfjord – our first port of call, after a charmingly smooth day at sea. The English aristocrats first flocked to this remote village for its salmon fishing; salmon return to the same place each year to lay their eggs. However, with my fellow Victorians unable to control themselves, the salmon were eventually unable to satisfy demand, and they stopped returning. I take one of the ship’s excursions of the wider area as the port village itself is so compact it could fit on a postage stamp. It’s our first day in the fjords, and even the chilly drizzle can’t dampen the excitement. Camera slung carelessly around my neck, I dart about, dodging puddles and the last remaining ice, on a mission to fill my memory card. Our guide, Gaia, is full of fascinating trivia and is a particular authority on the local troll and reindeer populations. Did you know, for instance, that Santa only employs female reindeer for his annual global gift gallivanting? Rudolph is actually Rudolpha. We know this to be true, Gaia says, because males drop their antlers in the autumn and, well, we’ve all seen pictures of Rudolpha performing her missioncritical duties on Christmas Eve, resplendent with her complete antlerage. Fascinating. The Norwegian fjords are one of those cruise destinations that continue to delight even once the ship has departed port. As we sail towards our second stop – Ålesund – the outside decks crackle with the click of cameras, capturing the masterpiece of nature on the other side of the lens. There’s an eagerness to snap every crag and crevice, and to observe each expertly manipulated manoeuvre as we navigate our way through the
DISCOVER THE FJORDS IN STYLE
Main: Holland America Line’s Rotterdam in all its glory; Below: the stark beauty of Eidfjord; Right: the famous goats of Herdalssetra
THE TRAVEL HACK
If you want to look suave on your holiday and aren’t sure whether there’s a dry cleaning service (or even an iron) a shirt carrier can be a life-saver. This one from Packshi is a hard, moulded case that perfectly follows the contours of a freshly-pressed shirt. Light and compact enough to fit into a small suitcase, it will save you time and effort upon arrival. • £30, packshi.com
complex channels. Ålesund wears a perfume of mountain fresh infused with marine oil. I climb mount Aksla with a friend I’ve made onboard and we sit at a picnic bench gazing out over the nautical town. It must be a magical place to live in summer, with 20 hours of daylight illuminating the dramatic mountain backdrop across the calm water, but I don’t know about those long winters of semi-permanent darkness. A local tells us that alcohol taxes are especially high in Norway in a governmental
effort to dissuade people from turning to the bottle in the desolate depths of winter. What a difference a season makes, from our picnic bench, Ålesund is inspiring. The fifth day of our voyage is a highlight I’ve been looking forward to since booking the cruise. I’m visiting the mountain goats at Herdalssetra – a family farm in Geiranger. Farm animals offer a certain solace to the Victorian gentleman, and I often find myself enjoying the company of a goat or pig – surprisingly sensitive companions, should you be in need of a patient ear.
Forty minutes into the mountains, Åshild and Jostein run a goat farm that has been in her family since the 1700s. Once bursting with farming activity, this lush valley has few survivors. Herdalssetra keeps goats, while there’s a farm “over there” – Jostein waves his hand vaguely – that keeps cows. The husband-and-wife team is supported by a roster of visiting students who pitch up from across Europe to milk the goats and live the farm life for a season. It’s easy to see why Åshild and Jostein never need to advertise vacancies; one stu-
MONDAY 11 JULY 2022
CITYAM.COM
THE LONG WEEKEND
dent recommends the next, keen for their dose of pure mountain air, cupping their hands to drink the pure snowmelt from the glacial fjords and experiencing life in the Norwegian region famed for the longevity of its population. I feel a world away from the ship and an age away from modernity. With its rudimentary simplicity, life on a Fjordic farm is revitalising. Åshild wants to show me how she makes cheese using their goats’ milk. I want to taste the cheese, so I agree to a demonstration. Outside, under a wooden veranda, she stirs a smouldering black-iron cauldron of milk over a wood
CRUISE CONTROL
TOP TIPS FOR SHORE EXCURSIONS
Book Ahead: Book online before you sail as the most popular excursions sell out fast. Think food: If an excursion is longer than a couple of hours or goes over a meal time, check it includes food. A local meal adds authenticity to your experience, and stops you getting hangry. Go private: Ship excursions guarantee you won’t miss the ship, but private operators offer tours to suit your personal interests. Just check their reviews first.
fire. This may be for dramatic effect, as the ship will have departed long before she’s evaporated that much milk. After a few committed strokes of the milk, like a rower in shallow water, she relinquishes the wooden paddle and instead lifts a round wheel of white cheese out of a wooden mould. This one’s about a month old, she says, as if describing a child… or perhaps a kid. But it’s the block of caramel coloured brown cheese that I’m more intrigued by. Brown cheese is a local delicacy “made from what is given to the pigs in other countries”. They ought to finesse the sales pitch. Brown cheese takes the wasted whey from the original cheese-making process, combines it with cream and fresh milk and repeats the process, resulting in a dense block, with a distinctive salty sweetness. Åshild sells 4kg slabs to neighbours for Christmas and back at the port I enjoy brown cheese cookies and brown cheese chocolate fondant. The cruise concludes with a special event. Her Royal Highness Princess Margriet of the Netherlands – the godmother of the ship – is onboard to bless the vessel in a once-in-a-ship’s-lifetime naming ceremony. I never believed it would be possible to bring a theatre-full of people to tears over the christening of a floating hulk of metal, but by the time Princess Margriet blesses “this ship and all who sail on her”, there’s not a dry eye in the house. There are over a hundred cruise ships currently in construction and I will be eying up tickets for their inaugural sailings. With an enduring Victorian spirit, cruising continues to be a marriage of tradition and innovation, a way to discover – nay, create – the future.
NEED TO KNOW 7-day cruises to the Norwegian Fjords onboard Rotterdam start at $979 for an “Inside Stateroom”. “Verandah Staterooms” start at $1349. For more information, visit www.hollandamerica.com
THE WEEKEND: People have been partying in Mykonos since the 60s, and probably even before that. Today, the bold and the beautiful, from Grace Kelly and Jackie Onassis, to Beyonce and, er, Kim Kardashian, have all washed up on the island’s picture-perfect shores. There they loll around on vast white daybeds, bag a bargain at one of the designer stores that pepper the main town, Chora, and watch the crimson sun sink into the sea from the vantage point of Little Venice. And you should do the same. I’m not saying this is the perfect place for hedonists, but if you – or someone you know – owns a 16-berth yacht or a handy helicopter, get yourself there pronto. By day, you’ve got a plethora of pretty beaches to choose from; Paradise is aptlynamed, while Ornos and Platis Yialos cater for the stylish set. Late afternoons are for getting lost in the maze of whitewashed streets, checking out the latest Piaget or Prada handbag in the plate glass windows of chic stores which rub shoulders with traditional bakeries and Byzantine churches. And at night, take your pick of entertainment; there are cocktail bars, drag bars, EDM clubs, gay clubs and more. Get home just as dawn is breaking, go to bed, then get up and do it all again. WHERE TO STAY: Katikies Mykonos is tucked away from the madness, built into the hill above quiet Agios Iannos beach, which gives it a serene, relaxed vibe. Like 99 per cent of all buildings on a Greek island, it’s a series of stacked, snowy white cubes, its zigzag layout echoing the maze of Chora. There are just 35 rooms, all of which have either a small Jacuzzi on their terrace, or a bigger plunge pool. The interiors are minimalist but achingly hip, the Applestore-like matte white walls and smooth
LIFE&STYLE
17
KATIKIES MYKONOS CYCLADES, GREECE Laura Millar takes finds a haven from the craziness of Cyclades’ party island white floors punctuated by the furnishings’ pops of bright blue, which feature bird prints or ikat-like abstract designs. WHO GOES? Older, sophisticated European couples, stylish younger ones, and the odd American wanting to relive their backpacking days – but in style.
AVIAN FACT
Petros the pelican is one of the island’s most famous inhabitants; he was donated to the locals by Jackie O in the 80s, after another, older pelican died.
THE FOOD: Seltz champagne bar, on one of the lower levels, serves up local classics like grilled octopus, baked lamb and burgers. Up several flights of steps, next to one of the two main pools, you’ll find Mikrasia, which has only a dozen tables, set onto a bed of sand. Despite the casual, beach-shack feel, the food is high-end; the Anatolian cuisine includes dishes such as grouper with bonito broth or wagyu beef with truffle. ASK ABOUT: The hotel has its own boat, which can take you around the island to hidden beaches and coves, or on sunset cruises. It can also whisk you to the sacred island of Delos, said to be the birthplace of Greek gods Apollo and Artemis. Remarkably well preserved 5,000 year old ruins lie scattered across it, and a small museum contains artefacts from the civilisations who used to live here. And until October 31st, it also serves as an open-air gallery, thanks to a series of installations by artist and sculptor Antony Gormley. AND AFTER THAT? Check out the windmills which loom over Little Venice; they’re no longer in use but they make for a good photo-op. NEED TO KNOW: Rooms at Katikies Mykonos start from around £298 per night, including breakfast. BA flies direct to Mykonos from around £322 return, ba.com
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SPORT
CITYAM.COM
MONDAY 11 JULY 2022
SPORT Djokovic prevailed at Wimbledon but Kyrgios was the compelling story, writes Matt Hardy
I
T REPRESENTS an interesting state of affairs when Novak Djokovic wins his fourth consecutive Wimbledon title – his 21st Grand Slam triumph – and yet there’s a sense of his losing opponent Nick Kyrgios being the real story to come out of the All England Club this year. Despite ultimately going down 4-6 6-3 6-4 7-6 (7-3) to Djokovic, Kyrgios came out with intent only to fade as afternoon became evening in SW19. And while he’s far from an unknown name, in his first ever Grand Slam singles final it was the Australian’s story that has resonated with many. A man who has battled with himself in the past, in need of external help to keep him on track at times, his fiery appearance on Centre Court was a breath of fresh air. “Absolutely not, I’m so tired,” he joked when asked whether he was hungry for more. “Myself, my team, we’re all exhausted. “I’m really happy with this result, it’s probably the best of my career, and hopefully one day I’ll be here again but I don’t know about that.” His run to the final wasn’t without controversy, mixing a personality that’s so compelling with elements of petulance that can be off-putting, but his superstar brand of tennis has kept fans engaged. And though he continues to face issues off the court – including an allegation of assault made by a former girlfriend – there’s a sense of a breakthrough for Kyrgios, and that this is not the end for the Australian.
VILLAINS
Despite the disparity in titles, something he shares with the 2022 Wimbledon champion is the ability to be pinned as the villain but shine nonetheless. Djokovic has not always enjoyed the backing of the Centre Court crowd but there’s a feeling of mellowing in his 35th year – he has smiled his way through this tournament and resonated with fans. The addition of his seventh Wimbledon title may be his only one this year, with his vaccination status an obstacle to his potential appearance in the US Open, but Djokovic has closed the gap to Rafael Nadal’s current Slam record of 22. The tennis on south west London’s premier court was astonishing under the Sunday sun and it took until the
NOVAK WINS BATTLE OF BROS
second set for Djokovic to win his first ever break of serve against the Australian – in their third meeting – and take his first ever set against the 27year-old after Kyrgios had raced away in the first. But from there there was always a feeling that the Serbian would eventually take the title. He became aggressive and accurate in trying to solve problems posed by Kyrgios while his opponent seemed to turn to his routine of shouting at coaches and complaining left, right and centre. Kyrgios featured in his first Grand Slam final
GOD-LIKE
“He’s a bit of a God, I’m not going to lie,” Kyrgios said of his opponent as he held the silver plate for coming second at the greatest tennis tournament on the calendar. “I never thought I’d be saying so many nice things about you considering our relationship – ok, it’s officially a brom a n c e ,” Djokovic replied. “I’ve lost words for what this tournament and
this trophy means to me,” he added. “It always has been and always will be the most special tournament in my heart, the one that motivated me to start playing tennis. “I saw Pete Sampras win his first Wimbledon in 1992 and I asked my dad and mum to buy me a racket. “I always dreamed of coming here and playing.” There was an audible tone of reflection in the voice of Djokovic – his wait for another Slam could be nearly 10 months away – but there’s no suggestion he’ll stop in his chase for 23. It was another brilliant Wimbledon final, a battle of personalities and styles, and a gentle reminder of the pure excellence the short grass season demands of its athletes.
KEY STATS ON CENTRE COURT: WINNERS
Djokovic: 46 Kyrgios: 62
TOTAL POINTS WON
Djokovic: 132 Kyrgios: 112
DISTANCE COVERED
Djokovic: 2632.7 metres Kyrgios: 2827.7 metres
ACES
Djokovic: 15 Kyrgios: 30
SPORTS DIGEST LECLERC WINS IN AUSTRIA AS SAINZ’S CAR CATCHES FIRE
£ Charles Leclerc cut his drivers’ championship deficit to title rival Max Verstappen to 38 points yesterday as the Ferrari driver won in Austria – at the home of Verstappen’s Red Bull. Leclerc’s teammate Carlos Sainz was on course to help his team to a one-two finish but the Spaniard suffered an engine failure which set his car ablaze. Mercedes’ Lewis Hamilton came home in third with team-mate George Russell in fourth. F1 moves on to France in two weeks before heading to Hungary before its traditional summer break.
ENGLAND BEAT INDIA BUT LOSE T20 SERIES 2-1 IN NOTTINGHAM
£ England avoided a whitewash Twenty20 series result against India yesterday as they beat their opponents by 17 runs in Nottingham. Dawid Malan hit 77 off 39 balls while Liam Livingstone knocked 42 not out to help England to an impressive score of 215-7. Suryakumar Yadav spearheaded India’s response with a brilliant knock of 117 but players continued to fall round him and his side failed to chase down the total. The win marks a good finish to an otherwise disappointing series for England, playing under captain Jos Buttler for the first time.
WIEGMAN EXPECTS OPEN MATCH AGAINST NORWAY
£ England Women’s manager Sarina Wiegman has said her side’s second Euros group game against Norway tonight will be open. The Lionesses come into this match off the back of a nervy 1-0 win against Austria while their opponents beat Northern Ireland 4-1 on Thursday. “They want to attack a little more, they’re able to attack a little more [than Austria]. I do expect an open match, a competitive match, she said. “They have changed over the years, in terms of the way they play. Ada [Hegerberg, striker] does a pretty good job.”
JUNGELS’ SUPREME BREAK HANDS HIM FIRST TOUR STAGE
£ Bob Jungels held on for over 60km to claim his first stage of the Tour de France as the cyclist from Luxembourg competed in his first French Grand Tour since having iliac artery surgery. The CG2R Citroen rider attacked on the penultimate climb, forced the gap on the subsequent descent and incredibly held on to win the stage. Tadej Pogacar retained the leader’s yellow jersey with Ineos’ Geraint Thomas and Adam Yates in third and fourth. Another British rider – Tom Pidcock – sits in seventh in the general classification.
RYBAKINA ‘DID NOT KNOW’ HOW TO CELEBREATE SW19 WIN
£ Wimbledon women’s singles winner Elena Rybakina has said she did not know how to celebrate winning at the All England Club after her triumph prompted a muted reaction. The 23-year-old became the first player from Kazakhstan to win a singles Grand Slam after she beat favourite Ons Jabeur in the final on Saturday. Her opponent joked that she’d show her “how to celebrate properly”. Rybakina lost the opening set 6-3 to the Tunisian but came back to win 3-6 6-2 6-2 to win the Venus Rosewater Dish for the first time.
MONDAY 11 JULY 2022
CITYAM.COM
SPORT
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Man City land eight-figure training kit deal
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RYPTOCURRENCY trading app OKX is to become Manchester City’s new training kit partner in a deal understood to be worth tens of millions of pounds per season. The eight-figure agreement is initially for one season and will see OKX replace Expo 2020 Dubai on the training shirts of both the men’s and women’s team. The move is a deepening of the existing commercial relationship between OKX and the Premier League champions, which began in March when it became City’s official cryptocurrency exchange partner. “We are pleased to expand our relationship with OKX, as they become the Official Training Kit Partner of Manchester City,” said Roel de Vries, chief operating officer of the club’s parent
One-year contract with OKX deepens existing partnership between club and crypto trading app, writes Frank Dalleres company City Football Group. “OKX and Man City are aligned on values such as innovation and success and for both parties, everything starts with training and education.” The deal with OKX continues the flood of money from the crypto industry flooding into sport and in particular football in recent months, despite many of the digital currencies plummeting in value. City’s neighbours and rivals Manchester United signed a training kit partnership with blockchain company Tezos in February believed to be worth £20m a year. Football has seen a backlash among
some supporters towards crypto involvement, including controversial fan tokens and club-related NFT sales. OKX chief marketing officer Haider Rafique said they were not concerned about any blowback from fans as a result of their deepening involvement with City. “I’m not expecting it,” he told City A.M. “We have a story for why we’re doing this: creating a generation of people who are thoughtful investors, who think about training more than buying a Lambo or going to the moon. But I wouldn’t write it off; there are always 5-10 per cent of people who won’t be happy.”
OKX positions itself as advocating a more considered approach to trading at odds with its rival Crypto.com, which has used the slogan “fortune favours the brave”. It says it plans to use City players in marketing materials to draw parallels between the work required to be an athlete and that needed to be a successful trader. “We’re saying fortune doesn’t favour the brave, it favours the trained and disciplined,” Rafique added. “We want to be the platform that helps people really understand the risk in trading and make sure they have the right discipline to be able to do this so they don’t lose their shirt.”
OKX will appear on City’s training shirts
Rebel clubs take breakaway fight to a hearing with big ramifications, says Frank Dalleres
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UXEMBOURG may not be a football superpower but it is in the tiny state over the next two days where the future of the game, and potentially many other sports besides, will be decided. Fifteen months on from its launch and swift collapse, the European Super League is to be the subject of a hearing at the European Court of Justice which could breathe new life into the controversial proposal – or kill off the plans for the foreseeable future. So wide-reaching are the implications that experts believe this case to be far bigger than the ECJ’s best-known intervention in football, the Bosman ruling of 1995 which upended the game’s transfer system. “The ramifications of the ECJ judgement for the future shape of football… cannot be underestimated,” said leading sports lawyer Darren Bailey, a consultant at Charles Russell Speechlys.
WHAT IS THE CLUBS’ CASE?
This week’s ECJ hearing is a result of a challenge from the three clubs still pushing for a European Super League – Real Madrid, Barcelona and Juventus – against governing bodies Uefa and Fifa and was initially raised in the Spanish courts last year. In simple terms, they argue that European chiefs Uefa and global counterpart Fifa have abused their dominant position by preventing other entities from forming rival competitions and sanctioning those who do so or take part in them. Should the ECJ rule in favour of the governing bodies later this year, it would uphold the current European model of sport based on open competition. If it backs the European Super League rebels, however, it could fragment football, leading to “rival tournaments being established by leading clubs supported by private equity partners, partially closed leagues being introduced and a radical new global calendar,” said Bailey. It could also make the biggest clubs even more powerful and attractive to investors, polarising the game further, and “turbo charge the Americanisation of the European model of sport”. Golf and swimming, facing their own
SUPER LEAGUE ROW HEADS TO COURT breakaway threats, will be among those watching closely. The case hinges on whether the ECJ continues to see football as exempt from a strict application of competition law. “This is a big call for the ECJ with the world watching on and the implications of their decision on the globe’s biggest sport going well beyond the ‘free agency’ Jean Marc Bosman case in the 1990s,” said Bailey. The European Super League rebels may take heart from a recent case covering similar ground in ice skating, in which skaters successfully appealed bans from competing in breakaway events imposed by the governing body.
WHY IS UEFA CONFIDENT?
On the other hand, the ECJ must consider not just the clubs’ and bodies’ rights but also the effect the verdict will have on football’s complex ecosystem and, beyond that, those of other sports. It may therefore opt to judge on a case-by-case basis.
This is a big call, with implications on the globe’s biggest sport that go well beyond the Bosman case Uefa is believed to be confident that the three clubs’ argument will fall down on legal grounds, having made a number of significant concessions since the European Super League that have weakened the rebels’ case. First, it dropped bans and fines issued to Real Madrid, Barcelona, Juventus and the nine other clubs – including Manchester United and Manchester City, Liverpool, Chelsea,
Tottenham and Arsenal – who signed up for the project but quickly performed a U-turn. “That was a banana skin that Uefa very quickly made sure it didn’t step on,” said an insider. Uefa has also revised its rules to ensure there is now clarity about needing authorisation to set up new competitions and, addressing the argument that it should not be both organiser and regulator, has given clubs an equal say in how the commercial rights to the Champions League are sold via a new joint venture.
‘BURNING DOWN ROME’
Legal arguments aside, the clubs face significant political opposition. EU Commission vice-president Margaritis Schinas has spoken up in favour of maintaining current structures, while more than a dozen EU countries are thought to have made written submissions to the ECJ opposing the rebels. None have come out in favour of them. Even if the European Super League
clubs were to win in court, the project has been so firmly opposed by every stratum of football – from players and managers to clubs and supporters, sponsors and broadcasters – that it is unclear whether it could be revived now. And in the remote event that it were, it remains to be seen who, if not Uefa or Fifa, would regulate a competition whose principal advocates are Real Madrid’s septuagenarian president Florentino Perez and Juventus chief executive Andrea Agnelli, dubbed a “snake” by Uefa kingpin Aleksander Ceferin in the aftermath of the failed breakaway. It is why one senior figure close to Uefa characterised the legal challenge as all but futile. “Why are you burning down Rome?” they asked rhetorically. “What’s wrong with reforming the current system rather than creating an entirely new parallel system? What are you trying to create that we all need to have. Even if it were an open competition, we’ve already got one.”