£ THE CITY VIEW: PAGE 2 LONDON’S BUSINESS NEWSPAPER THURSDAY 25 AUGUST 2022 ISSUE 3,807 FREECITYAM.COM
THE UK could be set for another carbon dioxide shortage after one of the UK’s main producers terminated production due to high energy costs –leaving brewers, pubs and food manufacturers fearing the worst. US outfit CF Fertilisers yesterday announced they were halting production of ammonia at their Teesside factory –instead importing the gas from the UnitedCarbonStates.dioxide is produced as a byproduct of ammonia production, and CF Fertilisers are one of the UK’s key suppliers. The business department fears that alternative CO2 supplies will only meet fifty to sixty per cent of UKCO2demand.isused in the production of everything from medical kit to craft beer, and CF provides a significant amount of the UK’s overall supply. Last year, CF Fertilisers received a short-term bailout from the UK government to continue the production of ammonia despite high energy costs. So-called ‘food grade’ CO2 is used to carbonate water and alcoholic drinks, dispense beer in pubs, ‘stun’ animals before slaughter and crucially to keep food cool during shipping. The carbon dioxide shortage prompted fears of empty shelves in supermarkets and pubs being unable to serve pints. City A.M. understands that the government is confident there will be sufficient CO2 to cover critical national infrastructure demand, such as that required for the running of nuclear power plants and the medical supply chain, but that other users including drink manufacturers may experience someLastshortages.nightEmma McClarkin, chief executive of the British Beer and Pub Association, said “the timing of this news couldn’t be worse” amid worries over inflation and energy costs.
Energy bosses rally round deficit fund and cap freeze amid price spikes
NICHOLAS EARL ENERGY bosses are rallying around Scottish Power’s call for a “tariff deficit fund” to ease the pain facing millions of Brits this winter. There are growing expectations Ofgem will announce a massive 80 per cent hike to the price cap this week, ramping up household energy bills to at least £3,500 per year from October. The cap is already at a record level of £1,971 per year. Scottish Power’s Keith Anderson has urged the government to consider a £100bn scheme to freeze the price cap for two years with state-backed loans, which would be paid back over 15-20 years by consumers.Hetoldthe BBC “bold” action was needed, describing forecasts of a £3,500 per year price cap in October as Business“horrific”.secretary Kwasi Kwarteng has held talks with UK industry bosses in recent weeks, including with Anderson. Kwarteng is likely to become Chancellor if frontrunner Liz Truss wins the Tory leadership contest, and Anderson believed he was seriously considering the supplier’s proposal. Octopus boss Greg Jackson has lent his support to the idea, while City A.M. understands Ovo Energy and EON UK are also supportive of the scheme. Bill Bullen, boss of Utilita Energy, has also called for a price cap freeze but said the vulnerable would need more help.
EXTINCTION REBELLION Khan urged to get tough on protests
“This news raises serious concerns for the sustainable supply of CO2 to the brewing and pub industry,” she told City A.M., urging the government to act to ensure “reliable” supplies. A government spokesperson said that “since last autumn, the... market’s resilience had improved” but that officials were examining options to increase UK supplies over the longer term.CFFertilisers said they will be able to meet all ammonia orders and there will be no disruption to fertiliser supply.
FEARSFOR BEERS THE CHANCELLOR WRITES ZAHAWI ON THE CITY, NEW NUCLEAR AND POLITICS P16 BANKSY BANKS IT GRAFFITI LEGEND COMES TO THE CITY OF LONDON P18
INSIDE FIVE-DAY WEEK DAYS ARE NUMBERED SAYS BANK BOSS P3 STRIKE TO DISRUPT NOTTING HILL CARNIVAL P5 CRYPTO CRIME SURGES P9 OPINION P16 SPORT COMMENT P19
NICHOLAS EARL
STEFAN BOSCIA SADIQ KHAN has been urged by the Tory caucus in City Hall to stop Extinction Rebellion’s planned occupation of Hyde Park next month. Susan Hall, leader of the London Assembly Tories, said Khan must intervene to stop the “hypocritical and lawless” climate change protest from taking up police resources. A spokesperson for Khan said the mayor “supports the democratic right to peaceful protest”, but that “protests must be carried out safely and lawfully and should not put Londoners or the capital’s economic recovery at risk”. The protest will begin on 10 September, with the group planning to occupy the park for three Extinctiondays.Rebellion shot to fame in 2019 for blocking off large parts of central London and blocking the entrances to buildings used by large multinational firms. They last appeared in the City earlier this year, hosting a drumming session outside the Lloyd’s of London building.
£ CONTINUED ON PAGE 3 CARBON DIOXIDE SHORTAGE SET TO HIT DRINKS MANUFACTURERS
TARTAN TATTOO Chancellor Zahawi yesterday enjoyed the Royal Edinburgh Tattoo Instagram-savvy swampies miss the point of City’s green role HERE we go again, then: Extinction Rebellion are set to return to London’s streets in September –either an inconvenience or a curiosity, depending on your tolerance levels. Last time they were in the City, in April, they turned the Lloyd’s building into a street party: brokers enjoying a lunchtime pint tapping along to the drums was certainly an unusual if welcome sight in the Square Mile. For all their enthusiasm though, Extinction Rebellion’s attacks on the City and global finance miss the mark. Take the protest against the spiritual home of the insurance industry: the very industry that provides the assurance to firms looking to embark on often speculative green finance initiatives. Such nuance is often lost on our friends on the loony left. For them, all the matters is that firms bail out of fossil fuels yesterday, regardless of whether there is any funding for transition or the research and development that can make renewables budget-friendly. The truth is that many of the new greener technologies we will use for our energy in the future require fossil fuels either as part of their manufacture or to bring them online. That’s before we get to the power required for mining the extremely rare materials vital to those new technologies: God forbid Extinction Rebellion find out how much copper is required to transfer energy through a wind turbine. Perhaps we are being pofaced. Irritating as it is when their more absurd protestors block motorways –and it is frightfully irritating –Extinction Rebellion is fundamentally an awareness-raising movement, and as a group it’s made pretty impressive headway on that front. But they need to be careful deciding who their enemies are. Global finance is the solution to our green transition –just as it will be the driving force behind everything from rebuilding Ukraine to improving healthcare outcomes across the developing world. Is the City at the heart of our ‘extinction’? Far from it.
THE GUARDIAN OIL FIRM ROCKHOPPER WINS £210M PAYOUT AFTER BEING BANNED FROM DRILLING A corporate tribunal has ordered the Italian government to pay more than £210m to the UK oil company Rockhopper as compensation for an offshore oil drilling ban.
A historic Inflation surge to more than 10 per cent, the biggest in 40 years, is threatening to throw the UK into the longest recession since the financial crisis. The Bank of England earlier this month forecast the country is headed for a 15-month long slump from the final months of this year, mainly driven by households and businesses wilting under high energy bills. Despite those warnings, the government has insisted it would not be appropriate to step up support before a winner out of Sunak and Truss emerges from the Tory leadership race on 5 “WeSeptember.simplycannot afford to see another month of the same old news,” Shevaun Haviland director general of the BCC, Barclaycardsaid.today said 77 per cent of SMEs are fretting over a recession.
THE GOVERNMENT is “running out of time” to save businesses and households from the inflation crisis, a business group has warned today. Policymakers should be launching measures now to shield Britons from the looming long recession, the British Chambers of Commerce (BCC) saidThetoday.BCC has written to Chancellor Nadhim Zahawi and both Tory leadership candidates, Liz Truss and Rishi Sunak, calling on them to send emergency grants to small businesses grappling with sky-high energy bills and cut VAT on energy bills, among other measures.Theletter echoes calls earlier this week from fellow business lobby group, the Confederation of British Industry, which said thousands of “viable businesses” will disappear without immediate government help.
JACK BARNETT
CITYAM.COM02 THURSDAY 25 AUGUST 2022NEWS
THE FINANCIAL TIMES CLIMATE ACTIVISTS TAKE UK GOVERNMENT TO COURT OVER FOOD STRATEGY Campaigners have launched a legal challenge against the government’s food strategy, arguing its lack of plans to cut meat and dairy consumption breaks laws including the Climate Change Act.
Government ‘running out of time’ to save firms and households from energy crisis
Britain’s small businesses are facing a grim winter as costs skyrocket
THE MAIL PREPARES TO TEAR UP UNION AGREEMENT IN BATTLE TO CUT COSTS Royal Mail is preparing to take on its striking trade union by tearing up a “groundbreaking” deal to protect jobs and conditions that was signed when the firm was privatised nine years ago.
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ONLINE retailer Farfetch paved the way for a future acquisition of fellow digital operator Net-A-Porter yesterday, picking up a 47.5 per cent stake in the firm from French luxury giant Richemont. Farfetch has the option to complete the acquisition at a later date, with the firm hoping to leverage tech improvements to add value.
CITYAM.COMCHARLIECONCHIE
Atom Bank boss backs the four day work week
Atom BankMarkfounderMullen our outlook and approach to implementing the new working structure.” Atom said in July it had notched underlying pre-tax losses for the year to March of £2m – a £34m improvement over the previous year – as income jumped by over 200 per cent and its loan book swelled to £3.3bn, up from £2.7bn in the previous year.
THE FIVE day working week is “in many cases, no longer fit for purpose for 21st century businesses”, the chief of digital lender Atom Bank told City A.M. as he hailed the success of a fourday week at the firm. Mark Mullen, who founded Durhambased Atom in 2014, rolled out a four day week for employees on a trial basis in November last year and said the move had boosted the financial performance of the bank and not deterred investors or customers.
A government spokesperson said: “We know the pressures people are facing with rising costs, which is why we have continually taken action to help households by phasing in £37bn worth of support.” Writing in City A.M. today, Chancellor Nadhim Zahawi said he was “preparing new options” to support businesses in the face of rising“Whoevercosts. is Chancellor from 5 September, I’ve made sure they’ll have a readymade menu of policies to help alleviate what is undoubtedly a severe economic situation,” he writes today.
Energy bodies call for boost to production
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“We introduced the four day week as a trial back in November and were clear that we would end the trial if there was a detrimental impact on customers, our people or on fulfilling our regulatory requirements,” he said. “For that reason, investors were happy with
Former Chancellor Rishi Sunak unveiled a support package in May –offering households £400 discounts on their energy bills, but wholesale prices have rocketed since that package was announced.
Separately, Offshore Energies UK has called on Westminster to back domestic energy production, forecasting that energy bills will remain elevated if the UK becomes increasingly reliant on overseas gas to meet its energy needs.
“At Atom, we feel the time is right for the next evolution in the world of work,” Mullen said. “We want and expect to see more companies introducing increasingly flexible working practices in the future, and encourage the government to focus on how such practices can be incentivised and implemented more widely,” he said.
NOT SO FARFETCH-ED Luxury giant Richemont sells control of Net-A-Porter
STEFAN BOSCIA LORD Peter Mandelson has called on Labour to “redouble” its efforts to bring in private donations amid claims the party is struggling to fill its coffers. Mandelson told City A.M. that Labour leader Sir Keir Starmer “cannot allow himself or the party” to become beholden to “hard-left trade unions” that “are going to try and use their financial muscle to get policy positions they want from Labour”. Labour’s largest Union backer Unite has threatened to completely withdraw its funding in the wake of Starmer’s efforts to moderate the party after Jeremy Corbyn’s premiership. Other left-wing unions have done similarly and Labour has been on a campaign to attract millions of pounds from private donors.
Plans to curtail Electoral Commission’s powers slammed by ex-board member
contenderleadershipTORY Liz Truss said at a appointingcommitrefusedthatyesterdayhustingsshetoto an ethics adviser if she wins the race as she has integrity”.acted“alwayswith
£100 prepaid Mastercard® when you get a Sky Glass TV. 0333 759 5176Visit a Sky store (£10 upfront TV fee. Cancel content anytime at 31 days’ notice) £39 from Sky Entertainment and Netflix included £100 Prepaid Mastercard with Sky Glass Offer Ends 01/09/2022. Subject to availability. Available to new Sky Glass customers and existing Sky Q and Sky + customers only. Limited to one card per household. Prepaid Mastercard® will be sent up to 41 days after purchase and activation of Glass and TV subscription. Prepaid Mastercard® can be used wherever Mastercard® is accepted, except for ATM’s, cashback, currency, credit card payments, overdrafts, credit agreements, memberships or direct debit subscriptions or at petrol stations. Offer not for Sky group employees. Further terms apply, see https://www.sky.com/help/articles/mastercard. Sky Glass TV: Subject to status and credit check. £10 upfront fee. £13pm for 43” Sky Glass on a 48-month interest free loan. Sky TV subscription includes fast forward ads (£0pm for 12 months then £5pm). 31 -day rolling contract for Ultimate TV. Sky Glass requires Sky Ultimate TV subscription (consists of Sky Entertainment and Netflix basic). Netflix Basic Subscription RRP £5.99/month. Netflix Terms of Use apply. All content on Sky Glass is streamed via broadband, minimum speed of 10Mbps required. Check speed with your broadband provider. Third party subscriptions required for apps. Ultra HD and Dolby Atmos Pack required to watch Sky content in UHD/HDR and with Dolby Atmos – requires minimum broadband speed of 25Mbps. Not all content available in UHD and/or HDR. Content must be optimised to watch in Dolby Atmos. Separate terms and conditions apply to Sky Glass and Sky TV subscriptions. You own Sky Glass. Option to purchase Sky Glass without a loan. Available in five colours subject to availability. Colour speaker fascias sold separate at: 43” (£39.99); 55” (£49.99); 65” (£59.99) each. Selection of shows/ series available and varies each month. 18+. UK only. Sky Glass must be set up in Enhanced mode to use Voice to turn TV on from standby. Energy Efficiency rating: 43” Sky Glass TV has an energy efficiency rating of G on a scale of A-G. General: UK residential customers only. Email address required so we can keep in touch about your services. Calls to Sky cost 7ppm plus your provider’s access charge. Calls to Sky contact centres are free for Sky Talk customers. If you’re not with Sky Talk, calls to 03 numbers cost the same as calls to 01 or 02 numbers and are included in your calls package. If you don’t have a calls package, charges may apply, check your provider’s tariff guide. Correct at 18/08/2022. Further terms apply.
NO NEED FOR ETHICS ADVISER Liz Truss said she won’t commit to independent body Starmer reiterated his support for Ukraine Mandelson said Labour cannot be allowed to be the “plaything” of unions
STEFAN BOSCIA BORIS Johnson made a surprise visit to Kyiv yesterday to mark Ukraine’s independence day and reiterated the UK’s support for the war-torn country. Johnson also said higher energy bills were worth paying to support Ukraine in its fight against Russia and that “if we’re paying in our energy bills for the evils of Vladimir Putin, the people of Ukraine are paying in theirTheblood”.Prime Minister added that “I believe Ukraine can and will win this war”. While Russia has been able to take large chunks of eastern Ukraine, its earlier advances into other parts of the country have failed. Labour leader Sir Keir Starmer, who was in Salisbury yesterday to mark the country’s independence day, said: “The UK remains totally united in the face of Russian aggression. Our commitment to the Ukrainian people will never waver,” he said.
Johnson visits Kyiv for Ukraine’s independence day
CITY A.M. REPORTER OUTGOING Prime Minister Boris Johnson has been accused of “partisan interference” over his plans for greater government control of the UK’s election watchdog. The draft proposals would strip the Electoral Commission of the power to bring its own criminal prosecutions for breaches of election law. They would also impose a duty on the body to follow the government’s “priorities”.LevellingUp Secretary Greg Clark said the plans were “a necessary step to increase the accountability” of the commission to parliament, while also “respecting its operational independence”.ButDavidHowarth, who served on the Electoral Commission’s board from 2010 to 2018, told Opendemocracy yesterday that the draft plans are “precisely the kind of partisan interference with the commission that we feared”. When the plans were first put forward last year, critics accused Johnson of attempting to “neuter” the independent watchdog. The consultation on the draft proposals closes on 5 December.
One senior party source said “the donation drive just isn’t getting in the big numbers that were hoped”. Labour’s recently released financial accounts showed the party was £4.8m in deficit, after a 91,000 drop in members and millions paid out in legalThefees.accounts did show there was a £4.3m annual increase in donations in 2020-21, however many of the party’s largest contributors were still mostly trade Mandelsonunions.said Starmer cannot allow the party to become the “plaything” of militant unions and that those who “want to see a centre-left Labour government take must reach into their own pockets”.
Labour cannot cave in to unions says Mandelson
CITYAM.COM04 THURSDAY 25 AUGUST 2022NEWS
KATIE BOYDEN
LOUIS GOSS BOEING and Rolls-Royce backed aerospace engineering firm Reaction Engines is preparing to launch a more than £1bn initial public offering (IPO). The carbontodesignedbeginlaunchedUS’thefinancepeoplecurrentlythewhichRoycecompanies,some£1bncouldReactionaerospaceVarvillRolls-Roycefirstmarketsviewpre-IPOshareholdersspaceplaneOxfordshire-headquartereddesignerhastolditintendstoraisearoundoffunding,withatolistingitssharesonpublicassoonas2024,SkyNewsreportedlastnight.Firstfoundedin1989byformerengineersRichardandJohnScott-ScottandpioneerAlanBond,EnginesexpectstheIPOvaluethefirmatbetweenand£2bn.ReactionEnginesisbackedbyoftheworld’smajoraerospaceincludingBoeing,Rolls-Holdings,andBAESystems,boughta20percentstakeinfirmin2015.Thespacevehicledesigneremploysmorethan200inOxfordshireandDenver.ThefirmhasinthepastreceivedfromtheUKSpaceAgency,EuropeanSpaceAgency,andtheDARPAresearchagency.Lastyear,ReactionEnginesaspin-outcompanytomarketingtechnologyfirstforitsSabrerocketengineenableuseofammoniaasazero-fuel.
05THURSDAY 25 AUGUST 2022 NEWS
EUROTUNNEL has said its services are back to normal after an incident stopped a train under the English Channel on Tuesday afternoon. The 3.50pm service from Calais to Folkestone was stopped in the tunnel after an alarm sounded on board. The train was carrying 100 vehicles. Passengers were transferred to a different train through a service tunnel and taken to Folkestone, Passengers, however, complained of long delays, with some suggesting they were stuck in the tunnels for more than five hours. Videos on social media showed holidaymakers walking through the alternative tunnel alongside the 31mile rail route between Britain and France, some with suitcases and dogs. Travellers in Calais were told to stay away from the terminal until 6am yesterday.Eurotunnel has defended the time taken to resolve the incident, saying operations such as this “do take time” but are for the safety of everyone and “must be conducted carefully”.
LOUIS GOSS MASTERCARD is set to launch a cryptocurrencies payments card after striking a deal with Binance, the world’s largest crypto exchange, it announced yesterday. The crypto debit card will let users pay for everyday purchases using various cryptocurrencies, including Bitcoin, that they have stored in their Binance accounts. The payments card, which converts cryptocurrencies into fiat currency, is set to be made available to all new and existing Binance users in Argentina in the coming weeks, with plans for further expansion in the works. Users of the crypto card will be able to make purchases and pay bills at more than 90m online and high street shops, after signing up for the card with a valid national ID. In a Linkedin post, Mastercard chief executive Michael Miebach said the new card will help “unlock the full potential of blockchain technology” by making it easier to access and use digital assets.
Binance executive Maximiliano Hinz said the Argentina launch will be a “significant step in encouraging wider crypto use and globalBritishadoption”.customers are however unlikely to gain access to Binance’s payments card in the foreseeable future, following the Financial Conduct Authority’s decision to blacklist the crypto exchange for money laundering failures last year.
CITYAM.COMCHARLIECONCHIE
Unite warns of disruption to Notting Hill Carnival due to strike
The Union warned that those going to the carnival this weekend could face disruption complained about being stuck in the tunnels for more than five hours
THE UNION Unite yesterday warned of travel disruption for those going to the Notting Hill Carnival as over 1,000 bus drivers working for London United are set to strike during the Bank Holiday weekend. Striking bus drivers operate from several depots including Park Royal, Shepherd’s Bush and Stamford Brook, which serve routes close to the carnival. Unite’s general secretary Sharon Graham accused London United’s owner RATP of refusing to pay its workers “a decent pay increase” despite being “an incredibly wealthyAccordingcompany”.tothe union, the dispute stemmed from workers being offered a 3.6 per cent pay increase for 2022 and 4.2 per cent next year, while the retail price index stands at 12.3 per cent. It is understood that, overall, the increase would amount to 7.95 per cent, in addition to a bonus in December. RATP rebutted the accusations and called on the union to “return to the negotiating table”.
bridge-based firm, which provides software tools for utilities, oil and gas producers and transportation firms. The 2017 tie-up cost Schneider £3bn and marked its third attempt from 2015 to take control of the firm. Michael Hewson, chief market analyst at CMC Markets, said the potential deal was “another example of an overseas business trying to pick up a UK asset on the cheap”. A host of UK-listed and UKheadquartered firms have been eyed up by foreign buyers in recent months, with equities in the UK still considered to be relatively cheap –often trading at far lower price to earning ratios than competitors in other markets. Deals and potential deals involving Cobham, Darktrace and others may leave politicians worried, Susannah Streeter at Hargreaves Lansdown has said, blaming Brexit fallout, the weak pound and a looming recession for the low valuations.
Mastercard strikes deal with Binance to launch cryptocurrency debit card
Passengers
ILARIA GRASSO MACOLA
SHARES in British software group Aveva leapt over 30 per cent yesterday after French industrial group Schneider said it was mulling a full buyout of theSchneider,firm. which already owns around 60 per cent of Aveva, said it had until September 21 to decide whether to go ahead with a full takeover swoop. “No proposal has been made to Aveva yet and there can be no certainty that any offer will be made, nor as to the terms on which any offer will be made (should one be made),” Schneider said in a Thestatement.announcement of a possible full takeover sent shares in the firm soaring, valuing the FTSE 100 firm at almost £9bn. The spike helped the firm bounce back from a sustained slide this year in which it had shed around 47 per cent of its value before yesterday’s rebound. Schneider snapped up its stake in Aveva in 2017 to merge its own industrial software business with the CamAveva shares up as Schneider mulls takeover
Eurotunnel services ‘back to normal’ after passengers stuck for five hours
Shoppers could use crypto to pay for milk and bread under Mastercard’s plans
UK forfirmspacecraftprepares£1bnliftoff
a welcome boost to its share price yesterday PA
The software firm saw
CITYAM.COM06 THURSDAY 25 AUGUST 2022NEWS
B RITAIN’s principled stance towards Kremlin-backed energy supplies following Russia’s brutal invasion of Ukraine six months ago is a rare example of statements of solidarity being matched by meaningful action. However, this has come at an immense price. While the UK might only be dependent on Russia for eight per cent of its oil and four per cent of its gas, markets are global and its efforts are part of a western push to isolate the offlineStreamgrowinglevelspowerwholesaleEuropesqueezingrobustlyPutinKremlin.hasrespondedtothispressure,suppliesintoanddrivingupcostsandpricestorecordagain.ThereisevenconcernNord1couldremainafterunscheduled maintenance later this month. British household will bear the brunt of this, with an expected 80 per cent hike to the price cap set to be announced later this week, taking energy bills to an eyewatering £3,500 per year. There are also growing concerns of blackouts this winter, as countries scramble to secure dwindling available supplies from other buyers. While the National Grid has confidently predicted there will be enough supplies this winter, this is based on surplus being available from overseas via the interconnectors.UK’sHowever,thesecountrieswillinevitablyprioritisedomesticneedsasthesupplycrisisbites.
NICHOLAS EARL ANALYSIS UK’S RUSSIAN EXIT WON’T STOP WINTER CRISIS AS SUPPLY SHORTAGE BITES SOURCE: ONS
UK sanctions on trade with RussiaRussian invasion of Ukraine
The west and Tehran are still in negotiations over a potential revival of the nuclear deal. OPEC+ are producing 2.9m barrels per day less than its pledged production hikes this year. This makes any decision to cut supplies complicated to calculate and likely to spur a western backlash.
NICHOLAS EARL JAPAN will restart more dormant nuclear plants and consider building next-generation reactors, revealed Prime Minister Fumio Kishida, in a major policy shift on nuclear energy a decade after the Fukushima disaster.Kishida told reporters yesterday he had instructed officials to come up with concrete measures by the year end, including on “gaining the understanding of the public” on sustainable energy and nuclear power.Theannouncement highlights how Russia’s invasion of Ukraine and soaring energy costs have forced a change in public opinion and a policy rethink toward nuclear power. Japan has kept most of its nuclear plants idled in the 11 years since a massive earthquake and tsunami in 2011, which triggered a nuclear meltdown at the Fukushima Daiichi power plant. Since then, it has pledged to build no new reactors, meaning a change in policy would be a starkHowever,turnaround.itisnow being seen as needed for the country’s green transformation, with the country targeting net zero emissions by 2050. Public opinion has also shifted amid rising fuel prices. Japan’s has historically been highly dependent on nuclear power, as its grid is not connected to neighbouring countries.
Japan aheadnuclearconsidersU-turnofwinter
S&P Global’s purchasing managers’ index (PMI) for the eurozone fell below the 50 point threshold that separates growth and contraction for the second month in a row in August. Germany, the region’s economic powerhouse, is wilting under the weight of sky-high gas prices. Berlin’s economic model has for decades been oiled by cheap Russian energy. Europe’s largest economy’s PMI plummeted to a 26-month low of 47.6 in August. The numbers paint “a bleak picture of the German economy,” Phil Smith, economics associate director at S&P Global Market Intelligence, said.
NICHOLAS EARL BRENT Crude held above $100 per barrel yesterday, after Saudi Arabia suggested OPEC should consider cutting output targets. Prices climbed 0.45 per cent last night to $100.70 per barrel, while WTI Crude remained steady at 94.37 – up 0.67 per cent. The world’s most influential oil cartel told news agency Reuters any cuts are likely to coincide with a return of Iranian oil to the market.
Britain buys no Russian fuel for record first time Octopus Energy Group will back early stage green energy projects across Europe
Octopus Energy unveils renewables fund backing UK’s largest battery
However, Europe has only committed to shunning seaborne Russian oil shipments. The bloc is also importing Russian gas, primarily because it has relied heavily on cheap energy from Moscow to produce goods and services. Economists have warned the Continent is headed for a tough recession, caused by Putin seemingly responding to western sanctions by choking gasEuropeanflows. gas prices have propelled to record levels, driven by the likes of Germany and Italy scrambling for alternative energy sources to replace Russian supply.
European currencies have weakened against the dollar, while global equities fell to a three-week low yesterday ahead of a US central bank symposium to be held tomorrow.Thiswill focus on efforts to tame inflation with higher interest rates, which could weaken growth and dent oil demand. OPEC and its allies are set to meet on 5 September to discuss future production quotas, amid continued capacity issues.
While oil prices are back around the century mark, forceful signals from central banks and falling equities have stalled any further rallies.
Oil has climbed to $100 per barrel again after Saudi Arabia hinted at future cuts
Oil holds firms on both benchmarks as Saudi Arabia proposes OPEC cuts
NICHOLAS EARL OCTOPUS Energy Group launched a new renewables strategy yesterday, targeting early stage green energy projects to reduce Europe’s reliance on gas imports The €220m (£185m) Octopus Energy Development Partnership (OEDP) Fund has already made its first investment, backing renewables developer Exagen – taking a 24 per cent stake in the company. Exagen is looking to rapidly grow the UK’s energy storage capacity, including developing one of the UK’s largest batteries – with 500MW of power at a rate of 1GWh. This means the battery would have the capacity to export the equivalent electricity usage of 235,000 homes in a single day. OEDP has also snapped up three solar farms with batteries on-site in the Midlands and North East of England as part of the deal, which Exagen is currently developing. The solar farms have a combined capacity of 400 MW, and will be built over the coming years.
JACK BARNETT BRITAIN has bought no fuel from Russia for the first time since records began, driven by the country shunning energy from President Putin in response to the invasion of Ukraine, figures published yesterday showed. Fuel imports from Russia plummeted to zero in June, the first time Britain has ever recorded a complete weaning off from Moscow energy, according to the Office for National Statistics (ONS). The figures underscore the severity of sanctions Britain has imposed on Russia in a bid to hobble its heavily energy exporting economic model. All imports dropped to a record low. They came as yesterday marked six months since Putin sent troops into Ukraine in February. Ukraine is also celebrating the 31st anniversary of its independence after it gained sovereignty in 1991 just before the collapse of the Soviet Union. Western nations have bound together to isolate Russia from the global economic and financial community. The UK and US have committed to cutting off Russian oil by the end of the year. Britain is still buying Russian gas.
P May ‘22Jan ‘22Sep ‘21May ‘21Jan ‘21 0 500 1,000 1,500 2,000 TOTAL IMPORTS OF GOODS FROM RUSSIA
The appointment of Southern’s successor and changes to the committees will be “announced in due course” when Southern and Bierwirth stand down in 2023, the company said in a statement yesterday.
Pinder Sahota, ABPI president
MILLIE TURNER
07THURSDAY 25 AUGUST 2022 NEWSCITYAM.COM
Chairman Stephen Hester said the incoming directors will strenghten the board
Carbon emissions cut by
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Winds of change blow over Easyjet in boardroom revamp
After four years, Nick Leeder has decided to leave his seat on 30 September, as his relocates to Singapore. Andreas Bierwirth announced that he will not be seeking re-election at Easyjet’s next annual general meeting next year, alongside senior independent director Julie Southern, who exits after five years and will join British technology group RWS Holdings as chair designate. Meanwhile Moni Mannings, who was appointed as Easyjet’s independent director in 2020, will become a member of the nominations committee.
BOTTOM
Government support needed to encourage pharma CEOs to shoulder cost pressures
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The figure was published in the Square Mile governing body’s first account of its progress toward reaching net-zero as part of its ambitious Climate Action ItStrategy.achieved the reduction through energy efficiency improvements to its property portfolio, including at its historic headquarters at Guildhall, the Old Bailey, and the iconic Barbican Arts Centre. Also published is a first-of-its-kind Climate Action Dashboard that gives a transparent public account of the City Corporation’s progress in reducing carbon emissions. actioncityoflondon.gov.uk/climate
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THE GOVERNMENT must help support the pharma industry so that CEOs are encouraged to shoulder cost pressures hitting the sector, the president of the Association of British Pharmaceutical Industry (ABPI) told City A.M. The industry is currently navigating staff shortages, inflation as well as dwindling investment, which risk further jeopardising the UK’s falling productivity levels. Some 97 per cent of medicine prices cannot be hiked in the face of rising costs, “so we’re having to absorb inflation pressures,” Pinder Sahota, whose industry body includes members such as Astrazeneca, Pfizer, Merck and GSK, explained. “There is real doom and gloom at the moment here in the UK. Inflation, energy prices, the war, strikes –it just feels like a pretty depressing environment,” Sahota added, leaving many industry bosses wondering: “How stable is the environment that we’re in?” Sahota called on the new Prime Minister to build on Boris Johnson’s pledge to make Britain a science superpower by 2030 by focusing on the opportunity to bolster the economy. The UK currently has the lowest spend on medicine in the“TheG7. worrying thing is our share of global pharma R&D has been declining over the past 10 years. In 2012, our share of global R&D spend was 7.7 per cent, but in 2020 that number moved to 4.2 per cent,” he said, citing figures from a PwC report in June, conducted on behalf of the ABPI. “That’s something that the government needs to focus on,” Sahota continued. “We’re being outcompeted because other countries will put the right incentives for R&D in place.” “If we can encourage more research and manufacturing… Then that has a positive impact on improving the health of the nation and productivity,”workforcehesaid.Thegovernmentmust also help ease the shortage of talent, particularly of data scientists and engineers, being channelled into the pharmaceutical space. “We do really need greater numbers,” he added. “Theseskillsetsare that other sectors are after as well.”
“Normally when issues arise, companies change management, starting from the CEO.” Easyjet went through an incredibly disruptive summer, suffering significant losses due to the travel chaos as well as staff strikes. The airline posted a £130m loss for the three months ended 30 June. According to aviation analyst Alex Macheras, many will question whether Lundgren “will genuinely focus on strategy to ensure the airline is placed back on track”.
Q UESTIONS on the future of chief executive Johan Lundgren arose yesterday following the revamp of Easyjet’s boardroom. The changes at the airline’s top took place almost two months after chief operating officer Peter Bellew stepped down during the worst of the travel chaos.Francesco Ragni, professor of aviation at Buckinghamshire New University, told City A.M. the revamp didn’t spell trouble for Lundgren. “It looks to me like it was very physiological,” he said. “The three outgoing members had a long tenure while the incoming three are top level.
HelpingCorporationmanage everyday issues
City
MILLIE TURNER EASYJET yesterday ushered in a trio of new non-executive directors onto its board, as three members announce their departure from the airline. Ex-Luthfansa exec Harald Eisenacher, Swiss logistics business Kuehne and Nagel former CEO Dr Detlef Trefzger and the former chief operating officer for Dubai Airports Ryanne van der Eijk will step onto the board at the beginning of EisenacherSeptember.willjoin the remuneration and finance committees, Trefzger will become a member of the audit and safety committee and Van der Eijk will step into the safety committee and also become one of the board’s employee representative directors.
new report by the City of London Corporation has revealed the organisation has cut its annual carbon emissions by 31% since 2018.
MACOLA TRANSPORT for London (TfL) is set to meet next Tuesday to discuss the government’s long-term funding deal. TfL yesterday confirmed the meeting will take place next week, but it remains unclear whether the board will accept the proposal made by transport secretary Grant Shapps on 22 July. The public body has been locked in discussions with government officials over the £3.6bn funding for more than a month to ensure the deal’s conditions were “fair and deliverable”.
the
Car dealer Lookers profits dip as soaring costs throttle jump in sales
Earlier this month, rival Cazoo posted a £243m half-year loss and was forced to axe 750 UK and EU jobs.
Crossrail bosses to advise Israel on building £33bn Tel Aviv metro
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GOVERNMENT
Toyota ad banned for encouraging ‘unsafe and irresponsible driving’
UK electric car chargers get £20m boost
On the same day, the latest round of government support expired and, since then, TfL has been operating on a dayto-day basis with its savings. According to TfL officials, without a proper long-term investment, the London network will fall into a “managed decline” scenario, which would include a raft of cuts to bus routes as well as underground service reductions.Buscutsand alteration are already in the works. The public body launched in early June a public consultation over its decision to cut or alter 78 of the current 620 routes. The consultation ended on 7 August, but the results have yet to be released.Inaddition to its financial woes, TfL has been hit by a series of overmembersAroundstrikes.10,000oftheunionRMTworkingforLondonUnder-groundtooktothestreetslastweekinadisputeoverpen-sionsandjobs.TubeworkerswerejoinedbyOvergroundstaffwhowentonstrikepay.
LONDON BUSINESS
TOYOTA’s ad for the GR Series car was banned yesterday after a watchdog ruled the promotional campaign “condoned and encouraged unsafe and irresponsible driving”. The ad appeared on the Guardian and the i between April and May, and depicts three cars driving close to one another on a country road, with text at the top saying “That GR feeling”. According to the Advertising Standards Authority (ASA)’s verdict, the campaign could entice drivers to “push the boundaries of safe driving by speeding or engaging in other unsafe driving behaviours such as, in the context of the image, racing or driving very close to other cars.”
Car firms’ profits are being hit by skyrocketing costs and supply chain disruptions
Crossrail will soon allow commuters to travel to Heathrow from Farringdon in 40 minutes
“We are grateful for the support we have received so far, and maintain we have met every condition that has been set by the government as we have worked towards agreeing a multi-year funding settlement that would give certainty to London and to the tens of thousands of jobs across the country that are directly linked to TfL,” said TfL’s commissioner Andy Byford on 3 August. The secretary, for his part, assured the offer remained in place.
TfL to meet next week to discuss crucial funding
ILARIA GRASSO MACOLA
The Local EV Infrastructure pilot scheme received £10m as part of the government’s £450m EV charging strategy for local authorities, which aims to increase the number of public EV infrastructure tenfold to 300,000 by 2030. The additional £10.9m was raised from private investment and public funding across the local authorities.
“The use of the initials GR is a naming convention, denoting the link to this halo engineering division,” it said.
The confidence seemed to convince investors, with shares closing up by more than 11 per cent.
“This scheme will help to level up electric vehicle infrastructure across the country, so that everyone can benefit from neighbourhoodshealthierandcleaner air,” said decarbonisation minister TrudyCommentingHarrison.on the announcement, Maria Connolly, head of future energy at UK law firm TLT, told City A.M. the public charging ramp-up will lead to “better data regarding usage and that data usage is critical for tracking revenue streams, building the business case and unlocking widerAccordingfunding”.torecent data from Volkswagen Financial Services UK, while the UK is currently ahead of the Climate Change Committee’s EV adoption curve, it lags behind when it comes to infrastructure.
NEWS
TFL
TO AGREE A LONG-TERM FUNDING DEAL DELAYED How we reported
Inflationary pressures have pushed up costs across the firm, with underlying net operating expenses rising 15.1 per cent above the same period last year to hit £224m, including the repayment of government support schemes. Staff costs also rose by £8.6m in staff costs. Lookers is not the only car dealership to suffer from the uncertain economic backdrop.
talks last month
ParltakeitsT after speakerjuincludesdescribeBytedan“Whileent officials ensure the deal network,” Richard Burge, chief executive fair and represents value for money for GROUPS FRUSTRATED BY THAT AND HAVE STILL NOT BEEN ABLE on funding
ILARIA GRASSO MACOLA
The car manufacturer defended it saying readers would not misinterpret the GR in the headline as a growling sound, but they would read it phonetically and relate it to the vehicle’s model.
The ASA banned the ad on the grounds that it promoted reckless driving
JACK MENDEL CROSSRAIL bosses are set to advise on a new state-of-the-art £33bn metro system for the Israeli city of Tel Aviv. Transport secretary Grant Shapps is in Israel this week, and agreed the deal as part of a post-Brexit MoU signed this “Followingsummer.thesuccessful launch of our iconic Elizabeth Line earlier this year, this memorandum is a fantastic opportunity for our British engineers and advisors to share their ingenuity with Israel as they undertake their largest ever rail project in Tel Aviv,” Shapps said yesterday. He said the partnership “further ingrains our commitment to a global Britain, helping our world-leading rail industry to extend its expertise to friends overseas, while unlocking fresh business opportunities to boost the UK economy”. On Tuesday TfL announced the next stage of Crossrail, which will soon allow commuters to travel to Heathrow from Farringdon and Canary Wharf in 40 and 51 minutes respectively.
CHARLIE CONCHIE AND ILARIA GRASSO MACOLA CAR DEALERSHIP chain Lookers yesterday reported a dip in profits for the first half of the year as soaring costs and supply strains offset a jump in revenue to £2.23bn. Bosses said that pre-tax profits fell from £50.4m in the first six months of last year to £49.9m in 2022, despite a rise in revenues to £2.23bn, up from £2.145bn last year. Despite vehicle supply disruption and inflationary pressures battering the economy, chief executive Mark Raban argued that performance was very“Westrong.arefocussed on operational ‘self-help’ efficiencies across the business,” he said. “Whilst mindful of the pressures facing consumers, we are confident in our strategic direction and retain our expectations for the remainder of the year.”
THE UK government and industry yesterday pledged over £20m for the rollout of 1,000 new public electric vehicle (EV) chargers across England.
“Although crime represents a small proportion of overall NFT trading, it has a disproportionate impact on the industry’s reputation and undermines the quality of experience of legitimate users,” analysts at Elliptic said. “NFT marketplaces must be proactive in risk management to mitigate these repetitional risks and issues. Sanctions screening solutions are also becoming increasingly essential for NFT-based platforms.”
Cineworld’s value has tumbled nearly 95 per cent over the last year as demand fails to return post-pandemic Rio Tinto’s initial bid for the Canadian miner was rejected last week for being too low
THE LARGEST investor in Britain’s biggest bank has said its push to break the firm up is driven by the aim to boost its Chineseprofitability.insurerPing An told Reuters yesterday it is “not an activist investor” in HSBC. Ping An, which holds a 8.3 per cent stake in HSBC worth around $10.3bn (£8.7bn), has been calling for the British lender to spin off its Asia business to maximise shareholder returns. Most of HSBC’s profits are generated in China and Hong Kong. In the first three months of this year, some $2.8bn (£2.3bn) of HSBC’s $4.2bn (£3.5bn) profits were booked in Asia. Jessica Tan, Ping An’s co chief executive, said the firm cares “much about long-term returns,” adding “we are not an activist investor”. “It is a significant investment and we’ve invested in it for seven years,” sheTheadded.comments mark the first time Ping An doubles down on HSBC break up calls
Barry Norris, chief of London-based Argonaut Capital which has reportedly shorted Cineworld for four years, said the firm’s pursuit of debt-funded deals had left it with a “completely unsustainable” capital structure.Cineworld is teetering on the edge of bankruptcy after racking up huge debts in its acquisition of US Chain Regal, which saw it saddled with $4.84bn (£4.11bn) in net debt, and it also faces nearly $1bn in damages to Canada’s Cineplex after it walked away from a takeover bid. Norris said the financial difficulties were of its own making. “This is not a company you should feel sorry for in any way,” he told Bloomberg TV, claiming it was “run on a wing and a prayer”. “The management team at Cineworld used too much financial debt to acquire an empire in a sunset industry,” he said. His comments come two days after chiefs at the cinema chain confirmed they were mulling options for how to restructure the firm, including a Chapter 11 filing in the US. Shares in Cineworld have been in freefall since Friday, shedding over 70 per cent of their value. The firm’s value has tumbled nearly 95 per cent over the past year. The group has been among the most shorted stocks on the London Stock Exchange over the past months.
NFTs worth more than $100m stolen in past year as crypto crime surges
CITYAM.COMJACKBARNETTANDCHARLIECONCHIE
YADARISA SHABONG AND SINCHITA MITR MINER Rio Tinto yesterday raised its offer to buy about 49 per cent of Canada’s Turquoise Hill Resources it does not already own to $3.1bn (£2.6bn).RioTinto also said miner Turquoise’s minority shareholders will receive C$40 per share. Turquoise last week rejected an offer by Rio Tinto for $2.7bn, saying the majority shareholder’s proposal did not reflect the Canadian company’s full and fair value.
NFT sales have boomed this year, with Bored Ape NFTs made popular by celebrities HSBC has pushed back again pressure to carve out its Asia business
CHARLIE CONCHIE CINEWORLD has been “run on a wing and a prayer” and will leave shareholders with nothing if it files for bankruptcy in the US, a short seller of the firm said yesterday.
the firm’s chiefs have addressed the break-up calls publicly, and come despite recent pushback from the bank against pressure to carve out the Asia business. In its latest set of financial results, HSBC hit back at Ping An’s calls, claiming a demerger would result in a longterm hit to the bank’s credit rating and raise its tax bill and operatingPingcosts.An’s campaign to break up HSBC was sparked by a large proportion of its Asia retail shareholders, mainly from Hong Kong, being starved of payouts during the pandemic. UK finance regulators ordered banks to stop paying dividends during the Covid-19 crisis to retain capital to weather the economic downturn. Restrictions on shareholder returns were lifted last year after British banks’ bottom lines were boosted by them releasing a wave of money set aside to deal with Covid-19 defaults.
09THURSDAY 25 AUGUST 2022 NEWS
Reuters
Rio Tinto sweetens buyout offer for Turquoise Hill Resources in $3bn bid Cineworld shareholders to ‘get zero’
“Rio Tinto believes this offer not only provides full and fair value for Turquoise Hill shareholders, but is in the best interests of all stakeholders as we work to move the Oyu Tolgoi project forward,” Rio Tinto chief executive Jakob Stausholm said. Turquoise Hill is a single-asset company holding 66 per cent of Oyu Tolgoi, one of the world’s largest known copper and gold deposits. The improved proposal is not subject to any financing condition or due diligence, Rio Tinto said.
CHARLIE CONCHIE OVER $100m worth of non-fungible tokens (NFTs) were reported as stolen in the past year as scammers pounced on a surge in interest in digital assets, new data has revealed. The amount of NFTs publicly reported as stolen through scams between July 2021 and July 2022 topped $100m and netted perpetrators around $300,000 per scam on average, according to a new report from blockchain and analytics firm Elliptic.
Analysts at Elliptic said that thieves had continued to swoop despite a downturn in the market this year, with over 4,600 NFTs reported as stolen in July 2022 – the highest month on record. NFTs – digital assets which record proof of ownership on the blockchain – have been the subject of a trading frenzy in 2022 as traders piled onto platforms like Opensea to buy and sell theSalestokens.ofNFTs passed $40bn last year and have hit more than $42bn already in 2022, according to Chainalysis last month.
“It’s as if the postman was paid to remove the ads from your mailbox and put his own instead,” said Romain Robert, programme director at Noyb.eu, with reference to Gmail’s anti-spam filters that put most unsolicited emails in a separate folder. Google did not immediately respond to requests seeking comment. A spokesperson for the CNIL confirmed the authority had received the complaint and that it was being registered. Vienna-based Noyb.eu chose CNIL, among other data privacy watchdogs, because it is known for being one of the most vocal regulators within the EU, Robert said. While any CNIL decision would be only applicable in France, it could compel Google to review its practices in the region. The CNIL imposed a record fine of €150m (£126m) on Google earlier this year for making it difficult for internet users to refuse online trackers.
Zatko claimed that Twitter had falsely told regulators that it had a solid security plan Twitter whistleblower provides new ammunition for Musk case
Tesla urges race bias lawsuit to be dismissed
CITYAM.COM10 THURSDAY 25 AUGUST 2022NEWS Reuters
A WHISTLEBLOWER’s complaint that Twitter misled federal regulators about the company’s security risks could provide Elon Musk with fresh ammunition in his bid to get out of buying the company for $44bn (£37bn).Thelegal showdown with Twitter has primarily centered around claims that the company misled Musk about the number of bot on its platform, but the whistleblower complaint by Twitter’s former security chief Peiter Zatko gives Musk new angles to pursue in his legal battle, such as claims that Twitter failed to disclose weaknesses in its security and data privacy.Itisnot clear if Musk’s team will use the whistleblower’s information.
MATHIEU ROSEMAIN GOOGLE has breached a European Union court ruling by sending unsolicited advertising emails directly to the inbox of Gmail users, Austrian advocacy group Noyb.eu said yesterday in a complaint filed with France’s data protection watchdog, the CNIL. The Alphabet unit, whose revenues mainly come from online advertising, should ask Gmail users for their prior consent before sending them any direct marketing emails, Noyb.eu (None Of Your Business) said, citing a 2021 decision by the Court of Justice of the EuropeanWhileUnion.Google’s ad emails may look like normal ones, they include the word “Ad” in green letters on the left-hand side, below the subject of the email, Noyb.eu said in its complaint. Also, they do not include a date, the advocacy group added.
DANIEL WIESSNER
TESLA lawyers yesterday urged a California judge to throw out a lawsuit by the state’s civil rights agency accusing the electric car maker of widespread race discrimination at its Fremont assemblyCaliforniapart.Superior Court Judge will hold a hearing on Tesla's bid to dismiss the lawsuit by the state Department of Civil Rights (DCR). Tesla, which is facing a series of other discrimination lawsuits brought by employees, says the case is politically motivated. In a complaint filed in February, the DCR said Tesla’s flagship Fremont plant in California was a racially segregated workplace where Black employees were harassed and discriminated against in terms of job assignments, discipline and pay. Tesla has denied wrongdoing, and its lawyers did not respond to a request for comment on Tuesday. Neither did the DCR. Tesla is facing a series of race and sex discrimination cases, most involving the Fremont plant.
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TOM HALS
Google accused of breaking EU ruling over ads
The UAE government and Dubai in particular are in good position to take steps on this in the coming years by implementing friendly start-up initiatives, mapping out large scale construction and infrastructure projects years in advance whilst building a lucrative and attractive business landscape. All this brings together a plethora of billionaires and millionaires the numbers of which have increased exponentially over recent years. Where the cash goes, opportunity flows. Apart from a single month of lockdown, Dubai was open as a tourist destination throughout where most countries struggled and was the quickest in the world to vaccinate. Add to this the successful six month EXPO just gone, high oil prices and the World Cup in Qatar at the end of this year which will bring millions of people to the region. The UAE has been surfing the crest of a few tasty waves for a while, mostly by design and swift action.
Greg Clark, the secretary of state for Levelling Up, said: “This is good news that will see thousands of leaseholders get the refunds they are entitled to. We will work with the CMA to continue challenging industry on its practices, so we can ensure more leaseholders get the fair deal they deserve.” more be after ground rents doubled
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The CMA previously investigated housing giant Taylor Wimpey which agreed to scrap the terms that were causing ground rents to double in December.Following further investigations, nine more companies that had bought freeholds from Taylor Wimpey have committed to axing the problematic doubling terms, the CMA announced on Wednesday. A further four national developers – Crest Nicholson, Redrow, Miller Homes and Vistry – have agreed to work with the companies who purchased their freeholds to remove the unfair clauses. It means 20,000 total homeowners will be compensated or see their ground rents remain at the original amount as a result of the investigation, which first began in 2019. Sarah Cardell, interim chief executive of the CMA, said: “For years leaseholders have been plagued by what we believe are unfair practices.” “That’s why we sought to tackle the problem by launching action against some of the biggest names in the business.”“Asaresult of our work, over 20,000 people now have a new lease of life, freed from issues like costly doubling ground rent terms.”
THOUSANDS more homeowners who paid a doubled ground rent on their property will receive a refund after the competition watchdog cracked down on “unfair” leasehold practices.Morethan 5,000 households in the UK will be compensated after being caught in contracts that saw their ground rents double in price every 10Manyyears.of these homeowners became trapped in homes that they could not sell or mortgage as a result of the costly terms, the Competition and Markets Authority (CMA) said.
Out of all of this, which space has seen the biggest scale up in adoption? Crypto and blockchain tech. Everyone in Dubai talks about it and has a coin or two. Over the last year the largest global exchanges have set up here to work with much friendlier regulators and compete for regional market share. This year’s pullback in financial markets will shake up the industry for the better as we are already seeing increased M&A activity locally and abroad which will bring together refined teams and the best will naturally pull in the same directions. Which organisations will stand the test of time remains to be seen but Dubai sure has a strong hand in offering the platform for it. If you are a growing business in Dubai, or an outstanding talent looking to move into the Crypto space in the region get in contact Justin Sağlam at justin@mwek.com If you are a Crypto or Fintech client scaling anywhere on the globe in Sales, Product Tech or Operations get in touch with Mark Weclawek mark@mwek.com/
11THURSDAY 25 AUGUST 2022 NEWSCITYAM.COM PA
DUBAI – THE NEXT FINANCIAL HUB?
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MILLIE TURNER SUPPLY and demand constraints have continued to wreak havoc on London rental costs, according to the latestCentraldata.London produced the highest average weekly rent in the year to date at £627, a rise of more than a third in comparison with last year, research by Foxtons, one of the largest real estate agencies in the country, found yesterday. New listings across the lettings market have plummeted 40 per cent so far this year.
refunded
W e are back with our latest pearls of wisdom, oh how have you must have waited dear reader! This time we focus on the Pearl that is Dubai. The glitz, the glam, the beaches, the restaurants, no income tax, the tall shiny things and the cool tech - the continually evolving superpower that is Dubai. Sounds too good to be true? Well perhaps it isn’t as the city is truly booming. Finance and emerging tech centres have ordinarily been cities with strong regulatory measures, high net worth individuals, funds, PE houses and VCs deploying capital like Elton John at Sunglasses Hut. With this, an ecosystem of workers is created drawing in hard working, ambitious talent from all over the world – NYC, LDN & HK boasting this over recent decades. In most regions the cost of living is increasing and tax hikes with it (some affectionately hidden, some simply obnoxious), is Dubai truly the next home for Finance?
“Rent is making headlines in the capital… London’s average rental price for new rents was £541 per week in July, hot on the heels of June’s £549 per week, which broke the record as highest monthly rental price in years,”managing director Sarah Tonkinson said in a statement. Average rental prices have been stuck within one per cent of the record-breaking highs seen in June. “As low stock and high demand are likely to continue for some time, we do not see average rental prices declining significantly in the coming months,” she warned. This comes as astronomical renting costs in the capital have led to a higher inflation rate in London than the rest of the UK, according to new figures released by City Hall. The figures show underlying inflation has been 1.5 per cent higher in London than the rest of the country over the past six months, after annual Consumer Price Index (CPI) growth in the UK hit 10.1 per cent last month. This has been driven largely by rental costs, with City Hall finding that “rents for new rentals in London are growing faster than anywhere else in the UK [and are] up as much as 15.8 per cent annually in the last three months”.
The governmentUAE and Dubai in particular are in good position to take steps on this in the coming years by friendlyimplementingstart-upinitiatives
Director of The M-Wek Company
ANNA WISE
Earlier in August, the watchdog was forced to drop its investigation into alleged mis-selling by housebuilder Barratt Homes after it found “insufficient” evidence to take legal action.Iturged people who feel they are victims of mis-selling to seek individual action instead.
The CMA said the wider leasehold investigation was moving into its final stages as it works with remaining firms that bought freeholds from Taylor Wimpey.
PARTNER CONTENT
London rents skyrocket as new listings drop despite increasing demand, Foxtons reveals Low stock and high demand is plaguing the london rental market, with rates reaching record highs
As the UK government faces the prospect of an all-out barristers strike from the start of next month, the Ministry of Justice (MoJ) is weighing up plans to expand the types of lawyers allowed to represent clients in criminal trials. The plans could see more solicitors granted advocacy rights, which would allow a greater number of the 157,000 solicitors in England and Wales step in for barristers during criminal trials. The MoJ could also bolster the UK’s Public Defender Service, which employs barristers on a salaried basis, with a view to having a more reliable reserve of criminal defenders. The vast majority of criminal barristers work on a self-employed basis without the employment rights offered to salaried professionals.
Notably, the introduction of new rules in 2007 to allow the formation of Alternative Business Structures (ABS) – that let lawyers start businesses with nonlawyers – transformed the Big Four’s prospects in the legal sector, by letting them fully integrate their legal businesses into their wider firms. Previously, the Big Four had been forced to ensure their legal arms remained separated. Yet, the introduction of ABSs into the UK market allowed greater connectivity, meaning clients could be more easily referred between departments.EY’sbidtosplit out its advisory business could also boost its law ventures in strengthening its brand and freeing it from the conflict of interest that prevent it from advising audit clients.
CITYAM.COM12 THURSDAY 25 AUGUST 2022LOUISNEWSGOSS
KPMG’s legal business has shown record growth of more than 30 per cent per annum over the past two years, Roome said, as he noted the firm is set to hire 200 new lawyers by 2024, including 45 directors and partners.
“As with other agencies across the world, we are also dealing with processing increasingly large volumes of digital evidence,” the spokesperson said. The slowdown in regulatory action has played out globally as penalties plunged 25 per cent, with around $1.6bn in fines issued for noncompliance with anti-money laundering, environment, social and governance and data privacy regulations in comparison to $2.11bn in the first half of last year, according to Fenergo.
“It makes no sense to expand a more expensive system as a solution to the government’s choice not to adequately fund criminal legal aid solicitors who provide a more cost-effective option,”a spokesperson for the Law Society told City A.M. “It is not increasing the pool of advocates, it is simply rearranging the same people,” they said.
The Big Four have capitalised on their brand recognition and the diversity of the UK’s legal sector – which is made up of more than 200 major players – by positioning themselves as “one-stop shops” for business and legal services.
Stratford added that the Big Four are able to offer more collegiate working environments, compared to traditional firms, as their existing client bases mean “the focus is not on winningThisclients”.hasletthe accounting firms win over lawyers, despite offering lower salaries than the top Magic Circle and USHowever,firms. the Magic Circle’s dominance at the top end of the legal market looks set to continue, as the Big Four struggle to overcome the lack of prestige that blocks them from winning the highest stakes work and recruiting top-tier talent. But mid-tier firms might be more worried.
Deloitte, EY, KPMG, and PwC have used their brand recognition, global reach, technological capabilities, and huge existing client bases to rival midmarket and even top tier firms.
The Big Four are now looking to seize an even larger share of the legal market, after making record gains over the past few years.
The slowdown in regulatory action has played out globally as penalties plunged 25 per cent
A spokesman for the Criminal Bar Association questioned the cost of building a full cadre of salaried barristers, explaining that paying salaried barristers for perks, including holidays and pensions, which are not paid out to self-employed barristers, could see a fully staffed Public Defender Service cost “north of £1bn”.
UK financial regulation fines slump by nearly half as impact of pandemic lockdowns lingers
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Matt Doughty, chief operating officer at DWF, told City A.M. the Big Four are “competing by bringing together lawyers with consultants and technology experts in a way many traditional law firms are unable to do”.
CHARLIE CONCHIE THE AMOUNT of fines dished out by the UK’s financial regulators has tumbled by nearly half in the first half of the year as officials catch up with a pandemic backlog, a compliance consultancy said yesterday.
The agility of the Big Four and their penchant for technology has let the accountancy firms compete with traditional law firms in facilitating their capture of the market for low-stakes, procedural work over the years.
who often come from less privileged backgrounds, and expand the Public Defender Service,” an MoJ source told the Daily Mail. The plans come after criminal barristers voted in favour of plans to call off their ‘week on, week off’ court walkouts and run a continuous strike from 5 September onwards over legal aidThefees.Law Society and Criminal Bar Association were sceptical of the plans.
Edward Stratford, director at legal recruitment firm Rodney Fox, said the Big Four are now increasingly going after high stakes work by hiring toptier legal talent. He explained that lawyers from traditional firms are being won over by the scale of the accounting firms and the global reach theyKPMGoffer.law head Nick Roome said lawyers are coming over to the Big Four for their “multidisciplinary approach” that allows more regular and long-term contact with clients. In traditional firms, lawyers may only interact with clients during specific transactions or legal disputes.
BIG TAKE ON THE LAW FIRMS
The Big Four’s legal ventures should worry mid-market law firms, writes Louis Goss
The Big Four are now looking to seize an even larger share of the market
The MoJ declined to comment.
T HE BIG Four’s first forays into the legal sector in the 1990s ended in abject failure. Yet over the past decade, the world’s four biggest accounting firms have captured a significant share of the UK’s market for legal services, and have increasingly begun to compete with traditional firms.
“We are looking to give more solicitors higher rights of audience to broaden the work they can do, increase the number of legal executives, Raab vows to break barristers’ court ‘monopoly’
JUSTICE Secretary Dominic Raab is seeking to undermine the barristers’ strike by breaking their “near-monopoly” over crown court trials, government sources told the Daily Mail.
Penalties from regulators in the UK fell by around 45 per cent to just under $18m in the first six months of 2022, down from $32,659,931 this time last year, according to financial crime consultancy Fenergo. The figures come after data from
the Financial Conduct Authority (FCA) in its annual report last month revealed the lingering impact of the pandemic on its enforcement activity. While the quantity of investigations stayed flat on the previous year, the timelines of investigations had been stretched from an average of 24.7 months to over 33 months. An FCA spokesperson told City A.M. last month “the pandemic and its impact on workplaces had a significant factor on timelines” but it aims to complete investigations within 12 months.
“It’s easy to assume that it’s just ‘digital native’ generations who are investing in digital assets, but this is not the case,” he explained.
CRYPTO AM NOMINATIONSAWARDSOPEN
NEWSCRYPTO IN BRIEF FOR ALL THE LATEST NEWS, VIEWS AND ANALYSIS HEAD OVER TO CRYPTOAM.IO Connecting the Community 13THURSDAY 25 AUGUST 2022 FEATURECITYAM.COM
“Baby boomers and Gen X too are becoming ever more aware of the intrinsic value of digital, global, borderless, tamper-proof and unconfiscatable currencies in an increasingly tech-driven and uncertain world. “Like the growing number of institutional investors – including pension funds, mutual funds, investment banks, commercial trusts and hedge funds – these older generations are starting to acknowledge that crypto is the future of finance and they don’t want to miss out.”
N EARLY half of all baby boomers and Generation X already own cryptocurrency or are intending to buy it before the end of 2022, a new global survey has revealed. The findings of the poll carried out by deVere Group come in as the prices of Bitcoin and other cryptocurrencies dipped this week due to inflationTheconcerns.surveyshows that 48% of the hundreds of people polled said they already had exposure to crypto or they were actively planning to invest to some degree in digital currencies before the end of the year.
Ethereum outperforming BTC, but trend is down
“As this year has proven again, the crypto market remains known for its volatility. Therefore, retirees or those on the cusp of retirement need to bear this in mind and not over-commit, as this could put the wider retirement strategy in jeopardy,” he added.“Asever, the best way to benefit from the huge potential of crypto is to seek professional advice.”
The deVere chief executive also suggested that, given the age of respondents, the exposure to crypto from those surveyed pointed to a wider retirement strategy.
“Why? Because not only is Bitcoin already the best-performing asset of the decade, it will, due to its fixed supply, only continue to appreciate over the long-term. “In addition, crypto exposure can typically deliver a legitimate diversification tool – which is how investors can seize opportunities and mitigate risk, especially during periods of higherDespitevolatility.”hisadvocacy of crypto, Green was quick to warn that the sector was still highly speculative.
The‘www.cityam.com/camsa22/’.–deadlineforsubmittingnominations to the awards is Friday September 30
IT WAS shaping up to be one of the stronger months of the year in the crypto markets, with the price of Bitcoin (BTC) pushing back up towards the $25k mark. However, the release of minutes from the latest US central bank meeting has again driven speculation that interest rate rises will continue, which coincided with a significant sell-off on Friday.
MARKET HEAT CONTINUES FOR CHILIZ FAN token-driver Chiliz (CHZ) continues to be the top performer in the flat cryptocurrency markets this week
The Etheruem-based token powering the Socios.com platform has seen a remarkable monthly rise of 122 per cent, and a sevenday lift of 14 per cent after briefly touching $0.26 per token yesterday. The price is, however, a far cry from Chiliz’ all-time high of $0.84 set in October 2021. Some of the price action is being attributed to football legend Lionel Messi being spotted filming a promotional video for Socios earlier this week.
GOOGLE INVESTED $1.5BN IN CRYPTO PROJECTS
GOOGLE has been quietly shovelling a massive $1.5 billion into cryptocurrency and blockchain companies for almost a year, data from an intelligence firm has Arevealed.research report by Blockdata shows the search engine’s parent company – Alphabet – has been showering blockchain and crypto projects with cash since September The2021.massive sum was shared between Dapper Labs, Fireblocks, Digital Currency Group and Blockdata’sVoltage.reportalso showed that South Korea-based Samsung pumped a billion dollars into 13 blockchain businesses, while Morgan Stanley and BlackRock invested $2 billion in crypto and blockchain.
NOMINATIONS for the annual Crypto AM Awards are now open. The event caps the two-day Crypto AM Summit and Awards at the Royal Leonardo St Paul’s Hotel in London, from November 22 to There24.are a total of 20 industry honours to be handed out. To nominate a company or an individual, visit the Crypto AM Summit and Awards web page
Bitcoin, the largest cryptocurrency by market capitalisation, lost 11 per cent of its value in a day – its worst drop in more than two months. Can it now regain its recent momentum? Thecurrent Bitcoin drawdown has now lasted for 287 days, and we are currently down 70 per cent from the all-time high. The 2018 and 2014 bear markets lasted for 12-13 months, with maximum drawdowns of 85 per cent. Is there further to fall?
Ethereum (ETH) has seen an even steeper sell-off over the past week, likely exaggerated by an extended bullish sentiment ahead of its long-awaited upgrade to a proof of stake consensus mechanism that its proponents say will make it faster and more energy efficient. ETH has significantly outperformed BTC during the past couple of months, seeing its market share peak above 20 per cent just seven days ago. However, Ethereum has underperformed against all the major cryptocurrencies over the past seven days, dropping 14 per cent this time last week, leading its market share to drop by almost one percentage point. Will the upcoming upgrade make a difference? Equity markets have also fared badly this week, suggesting that investors are again taking a risk-off approach. SPX is down two per cent, while the tech-heavy Nasdaq is down 2.44 per cent. This week’s key macro event is the annual Jackson Hole Symposium, with central bank officials from the US, UK and EU central bank’s attending.
Are baby boomers and Gen X lining up crypto pensions?
SONEVA LUXURY BREAKS OPEN UP TO CRYPTO LUXURY hospitality pioneer Soneva is now accepting cryptocurrencies across its resorts in the Maldives and Thailand. The holiday firm will facilitate the use of both Bitcoin and Ethereum as a means of paying for breaks at its high-end resorts of Fushi, Jani and Aqua in the Maldives, as well as Kiri in Thailand. It will even open up its property arm for Soneva Villa Ownership, offering the first and only scheme that allows foreign buyers in the Maldives to purchase real estate using cryptocurrency.
The respondents were in the UK, US, Asia, Africa, the Middle East, East Asia, Australasia and Latin America, and all born between 1965 and 1980.
Of the findings, deVere Group CEO and founder Nigel Green said the survey confirmed older generations were increasingly recognising the potential of cryptocurrencies.
The Buy recommendation for car dealers’ chain Lookers was left unchanged despite improved margin performance, updated forecasts and a half-year profit of £47.2m, which came ahead of guidance. “Given the strength of the order book, we should be upgrading, but questions centre on the supply of new cars rather than consumer confidence or willingness to buy. We leave forecasts unchanged,” analysts said. appear in Best of the Brokers, ger fall than expected. However, Fed officials have rolled back those expectations, prompting market participants to ramp up their bets on more rate rises. Higher borrowing costs tend to weigh on stocks by knocking company valuations and cooling household and business spending. The City also geared up their forecasts for further rate rises from the Bank of England, with money markets now betting borrowing costs will hit four per cent to tame inflation. HSBC fell 1.9 per cent against its largest Ping An insisted its break up calls were driven by maximising shareholder returns.FTSE100-lister industrials dragged the index lower. Rio Tinto and Anglo American lost more than two per cent. The pound weakened over 0.4 per cent against the dollar to buy $1.1783.
as Ping An chatter hits HSBC P 24 Aug23 Aug22 Aug19 Aug18 Aug 39 40 41 42 COSTAIN 24 Aug 39.95
L ONDON’s FTSE 100 edged lower yesterday driven by investors fretting over how stern central bankers will be with tackling inflation. The capital’s premier index dropped 0.22 per cent to 7,471.51 points, while the domestically-focused mid-ca FTSE 250 index, which is more aligned with the health of the UK economy, inched down 0.01 per cent to 19,305.23 points. London traders are eyeing the start of the annual symposium of monetary policy starting today at the Jackson Hole resort in the US state of CoolingWyoming.USinflation had ignited hopes Federal Reserve chief Jerome Powell may signal the pace of rate hikes will slow at his flagship speech on Friday. The rate of prices dropped to 8.5 per cent last month from 9.1 per cent, a bigCity eyes Jackson Hole and rate hikes
email your research to notes@cityam.com P 24 Aug23 Aug22 Aug19 Aug18 Aug 72 74 76 78 80 82 84 LOOKERS 24 Aug 83.40
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YOUR ONE-STOP SHOP FOR BROKER VIEWS AND MARKET REPORTS MARKETS DOWN A RABBIT
close.drawstheglobalanothercouldthisfiguresexpectedlower-than-despiteinflationinJuly.Ifhappens,wewellseelegdowninmarketsassummertoa
Analysts at Peel Hunt have picked the numbers of construction engineering company Costain and maintained their forecast for a profit before tax of £33.5m –up 1.5 per cent on the consensus estimate. The firm, analysts said, didn’t deliver surprises when it delivered a half-year profit of £13.3m as well as a free cash of £34m, a spot net cash of £95m and no dividends.
LONDON REPORT BEST OF THE BROKERS
Investors are worried that the US central bank will continue to raise interest rates at a rapid pace,
RUSS MOULD, AJ BELL
CITYAM.COM14 THURSDAY 25 AUGUST 2022MARKETS NOW AVAILABLE AT 600 FORSTANDINGSTATIONSUPBUSINESS
CITY DASHBOARD HOLE
MATTMETAVERSE Matt Hancock can now add ‘bizarre foray into metaverse’theto his growing CV of oddities. An avatar, supposedly of the ex-Health Sec was widely shared yesterday. But only hours later, he said the slightly creepy avatar had nothing to do with him at all although he ‘flattered’was
It’s vital that empowering regulators goes hand-in-hand with ensuring that they do not overreach in their duties. Financial services in the UK has the talent and tools to help vital areas of our economy flourish. To meet the net zero ambitions of this government, our reliance on nuclear power will likely have to increase. Small and advanced modular reactors – effectively, ready-made reactors – have the potential to revolutionise how households and businesses use energy, bringing reliable energy to millions. The “low-cost nuclear challenge” aims to develop a generation III nuclear reactor with funding from taxpayers matched with private investment. More of these kinds of partnerships will be vital in the coming decades. On a different scale, we know that small businesses are the lifeblood of our economy: almost 80 per cent of UK businesses have 9 or fewer staff. But I know from my own business experience – setting up and running YouGov – how tough capital raising can sometimes be. Access to new financing for scale-ups – of which there were over 33,000 in the UK in 2019– is difficult: the metrics and accounting ratios just aren’t there for small, private firms which are growing rapidly as they are for established public companies. So we need to think about how access to finance can be made easier, including by improving the availability of data to promote successful loan applications and funding rounds. But we’re already being proactive about supporting scale-ups. We know that access to top talent can prove a challenge, with seven out of ten scaleups citing access to it as a key barrier to growth. That's why we launched the Scale-up visa this week, with lighter touch sponsorship requirements, allowing international workers to come to the UK for an initial two years. For financial services, that means the best research professionals and software developers can help the City and its clients grow. From what I know and have seen in this job, the City and financial services in this country will continue to thrive. With the right tools to hand –and level-headed regulation – the potential of this vital part of our economy knows no bounds
OPINION
CITYAM.COM16 THURSDAY 25 AUGUST 2022EDITEDOPINIONBYSASCHA O’SULLIVAN
The Secondary Capital Raising Review – whose recommendations I have accepted in full – will allow retail investors to become involved in more capital raisings and companies to carry out fundraisings more quickly and cheaply. These are the kind of tools that I know will allow more British business – with thriving capital markets – to go for growth. The Bill will also ensure that those who are responsible for regulating financial services are more accountable. The Treasury select committee will have a greater role in overseeing the work of both the PRA and the FCA, through reforms such as ensuring that regulators must notify the committee of consultations, and respond in writing to any representations by Parliamentary committees.
£ Nadhim Zahawi is the Chancellor of the Exchequer
From crypto to talent, smarter rules for the City will help an economic recovery Nadhim Zahawi has said the UK will need continued growth in ourservicesfinancialforeconomicrecovery
Y OU MAY not have heard of them yet, but pension dashboards promise to be the next big thing for retirement savers. Just like your mobile banking app, they will allow savers to access all of their pension schemes in one place. They are another example of technology making personal finance more efficient. What’s more, their impact will be tangible. That job you had for six months and can’t find the pension documents for? Dashboards are expected to help recover some of the £20bn that British pensioners are estimated to have lost in unclaimed pensionDespitepots.the welcome news of shiny new dashboards, there is still a long way to go to safeguard Britons’ financial futures. Dashboards will help people who are well on their way to a healthy retirement income. But they are not expected to get people to saveThismore.year marks the tenth anniversary of auto-enrolment pensions, a success which saw pension participation rates doubling since they were brought in in 2012. But even this masks an arguably greater and more pressing issue: the disparity between private and public sector pensions. Recent statistics show that public sector workers have on average 249 per cent more added to their pension every year than private sector workers. How do we go about fixing the problem? Many pension experts have called for the government to raise the contribution rate at which workers are auto-enrolled to 12 per cent from the current 8 per cent. But with a cost of living crisis and rising inflation the government will be wary of automatically diverting more of each worker’ paycheck to savings. Scaling contribution rates will have to happen gradually over the medium-term. Next, we need to widen the number of people who are eligible for auto-enrolment. New laws, put before parliament, would lower the age of auto-enrolment to 18 from the current age of 22. This is a simple policy move to promote better savings habits at a younger age. Polling suggests it would also be popular with voters. Then there is the question of tax allowances. A Conservative government should encourage savings and investment. But the tax relief caps on annual and lifetime pension savings have been the same since 2014 and 2016 respectively. There is no good reason not to allow these allowances to rise with inflation, especially when it’s at the highest level in 40 years. There is an argument, however, for abolishing the lifetime allowance completely. Why effectively cap people’s savings? Investing in your pension and long term financial stability should be seen as a virtue. By removing the cap the government can encourage people to save and secure greater financial stability. Some argue that on paper, this looks like a huge tax benefit for the rich. In reality, the wealthiest people are more likely to concentrate investments in assets rather than pensions.
Advisers have previously branded the lifetime allowance a “double hurdle” for pension savers and said that it adds more confusion to an already complex system. In the same spirit as dashboards, we should be making pensions less complicated and far more attractive for savers to use. Cutting the red tape of annual allowances would do both. So yes, let’s do pension dashboards. But let’s also get on with the many other things the government can and should do to get people investing and ensure that they can have a comfortable retirement.
£ Daniel Harrison is chief executive officer of True Potential
We should be encouraging more savings for retirement, but instead we’re capping them HarrisonDaniel
W HEN I became Chancellor, I was determined to get out of the Treasury building and meet as many people and businesses as I could. I’ve heard the same story everywhere I go, across the UK: real worry about rising costs. I’ve reassured people that the government is already doing a lot – and we’re preparing new options to go further. Whoever is Chancellor from September 5th, I’ve made sure they’ll have a readymade menu of policies to help alleviate what is undoubtedly a severe economic situation. But worried as people are, I’ve also seen determination. A sense that however challenging things are right now, the businesspeople of Britain won’t be deterred. I’ve met some brilliant businesses. Inspiring entrepreneurs. And some of the most exciting – the most innovative – are in financial services. I know from my time in the Treasury just how vital this sector is for public services of this country: financial and professional services had a total tax contribution of almost £100bn, with 2.3 million jobs in the sector. From reinsurance to debt issuance, the City is already a world leader. But I’m not complacent. The government is ambitious. And we’re carrying out significant reforms to make sure we stay at the front of the international finance pack. Take the Financial Services and Markets Bill – which we’ve just published. The Bill should help to push the vanguard of innovation in areas like cryptoassets by legislating to bring stablecoins within the regulatory perimeter – where they are used as a means of payments. And it will allow and encourage firms providing services to other firms to experiment with the adoption of new technologies in financial markets through the use of regulatory sandboxes.
ZahawiNadhim
At the same time, companies should expect to be challenged too. The first Gen Z workers have already made an impact on company culture. They can be demanding – things like a better work-life balance, clear career progression, and “value alignment'' are not just preferences - they’re firm expectations. If their needs are not met, they can be very willing to walk away (Beyonce herself has recently endorsed this approach, encouraging fans to quit theirAndjobs).some don’t make it to their first day at work. Once firmly associated with online dating, “ghosting” is now alarmingly commonplace in the job market. Recruitment firm Randstad reported that 43 per cent of those aged 22 and younger accepted job offers –and then never showed up. One entrepreneur told me that they were shocked when, last year, none of four new hires showed up on their first day – with IT equipment bought, seating plans fixed and training put in place. They felt as jilted as anyone on Tinder. This year, they have communicated far more with new starters throughout the process and expect a happierAnotherresult.trend taking Gen Z by storm is “quiet quitting”. Beginning as a Tik Tok trend in China, the “lying flat” movement encourages workers to do the bare minimum if they feel under valued or appreciated, doing just enough to keep their job. While this concept isn’t new, it has certainly never been as widely celebrated. Some companies are responding by increasing “spyware” controls on company computers to track activity. Anyone who has parented teenagers in the last decade will smile at the naivety of thinking you can outsmart Gen Z usingSuccessfultechnology.recruiters have learned that it’s better to engage. Both Gen Z and their managers want to be understood better and both can work at that. Gen Z readers can consider applying the “is the role personalised to me and my values?” mentality to how they relate to their manager. Ask your new boss for their preferences. Do they like having prereading before a meeting? How regularly do they like updates on a project? Learning about your manager will enable Gen Z to foster a positive relationship that will make work more enjoyable and successful. Gen Z will provide us with fresh perspectives and innovative practices. Their passion, when they feel connected to their work, is invaluable. To attract and retain this generation, businesses must offer a transparent and open company culture, and clear communication channels. With that in place, we have also found that we can expect a strong work ethic and effective teamwork between all the generations.
30/5/2022
GENTLE GIANT Dugongs have gone missing from China’s waters from till 01/07/2022 is 79,855
ELENA SINISCALCO By 2025, Gen Z will account for 25 per cent of the global workforce
EXPLAINER-IN-BRIEF: THE PROBLEMS WITH FREEZING THE ENERGY PRICE CAP
St Magnus House, 3 Lower Thames Street, London, EC3R 6HD Tel: 020 3201 8900 Email: news@cityam.com Printed by Iliffe Print Cambridge Ltd., Winship Road, Milton, Cambridge, CB24 6PP Our terms and conditions for external contributors can be viewed cityam.com/terms-conditionsatDistribution helpline If you have any comments about the distribution of City A.M. please ring 0203 201 8900, or email distribution@cityam.com 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 17THURSDAY 25 AUGUST 2022 OPINIONCITYAM.COM
careers advice based on current labour market insight is essential to ensure that young people, parents and teachers are made aware of the full breadth of education and training routes, outside of just traditional academic ones, that can lead to rewarding and well-paid careers when they leave full-time education. With 85 per cent of those who complete apprenticeships staying employed, vocational routes may offer more secure prospects for young people.
And yet, according to a CBI survey, more than half of young people do not feel prepared for work. But why? Some point to the lack of opportunities, like work experience, during the pandemic. One in four students have had no practical experience in the working world, according to a report by Launch Your Career published last year. At the same time, the proportion of young people with Saturday jobs has halved in the last 20 years. This is not to say that Gen Zers aren’t doing anything (they are known as the Depop Generation for a reason), but these socalled side hustles, whilst showing energy and application, still don’t prepare school leavers for the structure of a formal workforce.
T
LETTERS TO THE EDITOR Results day, in context
HE END of August is back-toschool season. But September is significant for a different type of new beginning. Soon, thousands of businesses will be welcoming Generation Z graduates into the office. So who are Gen Z, and what advice is helpful for the incoming workforce and their new employers? Born between 1997 and 2012, Gen Z will soon surpass millennials as the largest work generation and by 2025 will account for 25 per cent of the global workforce.
WE WANT TO HEAR YOUR VIEWS › E: opinion@cityam.com COMMENT AT: cityam.com/opinion
£ Alex Cheatle is chief executive officer of Ten lifestyle group
Certified Distribution
In the UK, the energy price capdecided by Ofgem - sets the maximum price you can be charged for kilowatt hour. In short, it doesn’t put a cap on how high your total bill can get, but it regulates how it is calculated. The cap is reviewed every three months. In response to the catastrophic rise of energy bills predicted for this autumn, Keir Starmer has proposed to freeze the price cap for six Starmermonths.hasbeen praised for suggesting concrete solutions for struggling families, but some have also found fallacies in his plan. The Labour leader has calculated the measure will cost £29bn. However, the freeze would probably need to be in place for longer to have a real impact, and it could reach a price of around £70bn as inflation goes up, according to the Institute of Fiscal Studies. Another problem with the policy is that it doesn’t cover energyintensive institutions like businesses or schools, which risk having to switch the lights off without financial support.
David Phillips, City and Guilds
BraceCheatleAlex yourself, Gen Z and their ‘quiet quitting’ trends are ready for the workforce
For all their Depop side hustles, this hasn’t prepared Gen Z for a workforceformal [Re: Almost half of teens looking to enter business instead of going to uni August 18] As students receive their GCSE results, it’s no secret that their learning has been disrupted during a critical period in their education. Now, faced with a rapidly changing jobs market, a cost-of-living crisis and with a potential recession on the horizon, our latest research found that the majority (66 per cent) of 14-16 year olds now want to stay in full-time education for longer to help them get better paid jobs in future - with 51 per cent stating the cost of living has made them reconsider the type of career they might do after leaving school or college. So, as young people look to make a decision on their next steps for their final years at school or college, and with potential earnings and cost of living clearly a priority for younger people, it’s more important than ever that they understand the full range of options available to them, including which types of jobs are likely to be available when they finish their studies and what skills they will need to transition into Robustthese.
The dugong has been declared ‘functionally extinct’ in China with researchers looking for evidence the aquatic mammal is still swimming in the waters near China. On average, local people said they had not seen one in 23 years.
The hipster area of Stokes Croft in Bristol houses the first ever Banksy, Mild Mild West –allegedly painted over three days in 1998 before the artist was famous. It’s a comment on the relationship between the police and unlicensed raves in Bristol in the 1990s.
As the City’s first Banksy show opens, Adam Bloodworth explores the insane wealth behind the iconic graffiti art Walking into the Banksy exhibition at the new Red Eight Gallery at The Royal Exchange, the first artwork you’ll see is Morons, a depiction of an auction room upon which Banksy has scrawled: “I can’t believe you morons buy this shit.” Let’s just get this out of the way first: it’s blazingly ironic to host a Banksy exhibition here in the heart of the capital’s financial district, feet from the Bank of England’s gold vaults, given the artist has spent his career critiquing capitalism.Butthat’s all part of the fun. There’s an estimated five million pounds worth of the good stuff under lock and key at the new gallery, open from 25 August to 15 September, and highlights include an original worth £4.3m, as well as lithographs and limited edition prints produced by Banksy, which are expected to reach anything from £1,000 to £200,000 if bids are made by visitors. Next to Morons is a print of the gentler Girl with Balloon, one of Banksy’s most stand-out political pieces, expected to reach somewhere between £20,000 and £200,000. “People in the area have money to buy Banksys and Scarlett Millers and Damien Hirsts but they may not wish to go to Mayfair,” says North. “We want to set up right on their doorstep.” With the art on the walls organised by price point, the launch gives the distinct impression that money takes precedence over meaning, with the cheapest pieces by the door and the priciest hidden away in the safe echelons of the upstairs gallery, although QR codes tell the stories of the original creative visions, for those interested. The cost of Banksys has skyrocketed over the past fifteen years. Even souvenirs sold for a few pounds at his Dismaland theme park from 2015 are now worth thousands. Seven years ago, prints sold in the gift shop at the park went for £10. These days, they have reached £15,000 at auction, and items from the artist’s GDP Shop that sold for £500 in 2019 are now reaching over £160,000.“It’salmost as if Banksy is already dead,” says co-curator Julian Usher. “He’s not promoting work on a month to month basis.” Ascend the stairs in the gallery past another work, Welcome Mat, and the main attraction is Laugh Now, the only original Banksy on show, which is expected to fetch over £4m if sold. It’s a stencil on metal of a gorilla wearing an apron reading: “Laugh now, but one day we’ll be in charge.” On the left upstairs there’s a print of the famous Flower Thrower and opposite that, a Banksquiat print referencing the pioneering 1980s New York street artist Basquait, depicting a fairground carousel with crown shapes instead of seats. North notes that Banksy has “transitioned from a graffiti artist in the street to a gallery artist collected by investment bankers, doctors and lawyers,” but says the artist still makes time for the fun stuff. Banksy made headlines during the pandemic when he – it’s widely accepted it’s a he – made a piece on canvas of a boy playing with an NHS nurse doll, which appeared in the foyer of Southampton Hospital with a thank you note to staff. It raised more than £16m for an NHS charity after being sold at auction. The artist also gave Christopher Walken permission to paint over one of his Bristolian street pieces while filming BBC drama The Outlaws in 2021. There is so much interest in the artist that a thousand people have signed up to the gallery launch when only 500 can realistically fit in, says North, but one unlikely attendee is the artist himself. The elusive creative remains officially unknown, though Red Eight Gallery suspects his Pest Control “handling service” will be in touch to collect their resale rights from every Banksy sold by a third party. I can’t help but ask the most obvious, and most pressing, question: would North and his co-curators Julian Usher and Bradley George know if the mystery artist slipped in to mingle with the crowd? “I’ve got it on good authority who he is,” North teases, hinting at the fact that Banksy’s identity is the worst kept secret in the art world. “But I don’t think it will ever be revealed. It could be anyone. That’s part of the reason he’s been so successful.”
1998 –THE FIRST BANKSY
CITYAM.COM18 THURSDAY 25 AUGUST 2022LIFE&STYLE LIFE&STYLE
2008 –OUTED IN THE DAILY MAIL
THE LIFE AND TIMES OF BANKSY Left: Laugh now, one of Banksy’s most famous pieces; Below left: Items from the exhibition; Above, from left: Sean North, Julian Usher and Bradley George
£ Banking on Banksy’ is at the Red Eight Gallery at The Royal Exchange, Bank, 25 August until 15 September . Entry is free.
These 2002 stencil murals are probably the most famous and recognisable of his works. They depict a young girl reaching out for a heartshaped balloon and were dotted around London, including one at remainBridge,Waterloobutnonewheretheywere.
‘IT’S ALMOST AS IF BANKSY IS ALREADY DEAD’
I don’t think his identity will ever be revealed. It could be anyone. That’s part of the reason he’s been so successful
2018 SHREDDED– ART A version of Girl With Balloon was sold at auction for £1m in 2018. However, when the piece sold, a device in the frame began shredding the art, as bidders gasped from their seats. The shredded version ended up selling for even more than the non-shredded version: renamed Love is in the Bin, the piece sold for over £18.5m.
In 2008 the newspaper claimed it had performed “an exhaustive year-long investigation” in which they outed the artist to be a man called Robin Gunningham from Bristol, born in 1973, who attended the expensive Bristol Cathedral School.
2002 BALLOON–GIRL
19THURSDAY 25 AUGUST 2022 SPORTCITYAM.COM W
SELL A DREAM The nation’s focus, sharpened by the media, is on only a handful of Olympians and even fewer Paralympians.Thatwasevident again last week in the prominence of Dina AsherSmith’s failure to win gold in the 200m in Munich relative to teammates who actually won their events. The stirring runs by Laura Muir and Zharnel Hughes appeared lower down some reports, inadvertently underlining Asher-Smith’s rare Earlier this month five alpine skiers learned that their funding from UK Sport was being cut as the agency looked to other snow sport disciplines to fulfil its ambitions. I’m sceptical of the value of pumping lottery funds into the Winter Olympics, but have great sympathy for the five as the £800,000 they are looking to raise is a very big ask in the current commercial marketplace. It’s easy to sell a dream to an aspiring young athlete. Far harder to persuade them to look at the risks of their career decision amidst the excitement of early success, particularly when public cash appears to endorse But it need not be any less ambitious to ensure parallel paths are planned from the outset of careers rather than when they near their end – especially as that end can come suddenly and brutally.
SUPPLY-DEMAND IMBALANCE I’ve enjoyed watching the BBC ring the changes to its roster of pundits at the European Championships just ended in Munich and Rome. New faces have brought a bit more bite, fresher insight, welcome rawness. Richard Kilty, the former world indoor sprint champion who is never shy to express opinions with conviction, stood out. There’s a future in the studio for Kilty surely when he decides to retire. But his appearances last week are a reminder that the route into punditry is as the camel to the needle’s eye. Experts endure and vacancies are, consequently, scarce. Retired footballers were always said to turn their hands to running pubs or retraining as electricians or plumbers if they didn’t come from such professions in the first place, as in the case of Stuart Pearce. Wikipedia is a useful if unreliable
THE nowtv.com £ WarnerEdCOMMENTSPORT look to future?their RETIRINGTYPES
BILKED AND MILKED Now, at the top end of the game, the financial rewards in football are higher and opportunities for retirement planning more extensive.
but interests diverge the minute a player’s contract expires as he then becomes someone else’s problem –perhaps simply his own. If most professional sports are pure capitalist environments in which the best thrive and the rest struggle to survive, with all participants at least theoretically aware of what they are risking, what of those sports that society chooses to make professional through public funding? You might deem that retired golfers, cricketers, footballers, tennis and rugby players can be left to fend for themselves having taken their chances.Buthow about the Olympians and Paralympians who have effectively been paid by the lottery and exchequer to perform for our enjoyment and collective national pride? The longer Britain’s list of medallists has grown, the more extensive the number of athletes who come to realise that a medal, even a gold one, is no passport to future financial security. A gold-painted post box in your hometown does not pay the bills.
Ed Warner is chair of GB Wheelchair Rugby and writes at sportinc.substack.com
E MAY be just days away from seeing the last of Serena Williams in competitive tennis. The US Open, which starts next week, is marked out as the retirement party for the greatest tennis star of the modern era. At 40 years old, she’s late to step away from elite sport and does so with a net worth estimated by Forbes at $260m (£220m). But for all her plans of evolution protected by this financial cushion, Williams is still likely to feel a long time retired. Williams is one of the two greatest athletes I have had the privilege to see excel in the flesh. The other, Usain Bolt, has already slipped from view in the five years since retirement from the athletics track. Bolt’s football dream proved shortlived and the Virgin ads don’t run on TV anymore. Let’s hope we need have no fears for his wellbeing, nor any for Williams either. What, though, of the less financially secure athletes who we revere during their short bursts of success? Do we have any societal responsibility to look to their future?
Newcastle United are close to agreeing a club-record £58m deal with LaLiga side Real Sociedad for striker Alexander Isak. The 22-year-old has netted nine goals in 37 appearences for Sweden and has scored 44 goals in 132 appearences for Real Sociedad since joining the Spanish side from Borussia Dortmund in 2019. The youngster would become Newcastle’s fourth signing of the window after Matt Targett, Sven Botman and Nick Pope. The Magpies’ current club-record signing is Joelinton for £39.6m.
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The PGA Tour plans to boost prize money at 12 events next season in order to match the big-money rival LIV Golf Invitational Series. The tour’s 12 selected events will have an average purse of $20m (£16.9m), according to commissioner Jay Monahan. The payout for the player impact programme, which offers an incentive for players to promote coverage of the tour, will increase from $50m (£42.3m) to $100m (£84.6m) across 20 players.
Stokes’ England has been built on a policy of confidenceself-backingand It wasn’t his form letting him down, it was his body. That’s a very tough thing to deal with
Former Premier League referee Howard Webb will return to the English game as chief refereeing officer of the Professional Game Match Officials Limited. The Yorkshireman refereed the World Cup and Champions League finals in 2010 and has been a referee’s chief in the US and Canada since 2018
Newcastle United close to smashing transfer record for £58m Isak
ENGLAND captain Ben Stokes admits that honest and frank conversations with bowler Ollie Robinson contributed to the paceman earning a recall to the team for today’s second Test against SouthRobinsonAfrica.has not featured for the national team since the Ashes in January amid a series of setbacks – lower back injury, food poisoning and concerns around his fitness levels – but the 28year-old impressed for the England Lions against South Africa earlier this month, taking two wickets for 76 runs and lasting 25 overs. The Kent tailender replaces the impressive Matthew Potts in an otherwise unchanged side, with Robinson’s height expected to be an asset on the lesser bouncing Old Trafford pitch. “I was very honest with Robbo. I feel that’s something people deserve. Rather than just have a conversation to get through it, I’d rather let him know exactly where I stand,” said the England captain.“It’sobviously been a very difficult time for Ollie. It wasn’t his form letting him down, it was his body. That’s a very tough thing to deal with.” That emphasis on honesty looks set to be a theme of England under Stokes and head coach Brendon McCullum.Stokes’s comments on Robinson come days after it emerged that the Test captain remains on anxiety medication following a period of mental health issues that led to him leaving the sport for several months. In a documentary airing tomorrow, Stokes said: “I never thought I would be on medication to help me for that kind of stuff. I am not embarrassed or
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WEBB SET FOR RETURN TO ENGLAND AS REFS’ CHIEF £
CITYAM.COM20 THURSDAY 25 AUGUST 2022SPORT SPORT RETIRING TYPES Does society have a responsibility towards ex-sportspeople? PAGE RICCIARDO19
SPORT DIGEST
Recent events have shown how England have started to back their writesprocesses,
Matt Hardy ashamed to say it because I needed the help at the time. “But it’s not done just because I’m back playing. I still speak to the doc –not as regularly – and I’m still taking medication every day. It’s an ongoing process.”It’snot that the previous regime hid their opinions and their woes, but it seems as if the current group are encouraged to simply speak their mind. McCullum has publicly backed Zak Crawley despite the opener facing widespread criticism for his recent displays at the crease, while the side have also rallied around the aggressive style of play that they have adopted – dubbed Bazball.
BASHING BAZBALL? England under Stokes look to be in a position of comfort, are able to express themselves both on and away from the crease; a liberating take on elite international sport. That said, no matter the aura a team emits, it’s the result on the board that matters most. And this England side will today look to bounce back from their first loss under Stokes and head coachEnglandMcCullum.surrendered the first Test against the Proteas at Lord’s by an innings and 12 runs amid a third-day collapse with the bat.
PGA TOUR SET TO MATCH LIV PURSE AT 12 EVENTS £
MEDICAL DATA FIRM PART OF WORCESTER BID £ Medical data company Atlas SportsTech yesterday confirmed its participation in a consortium led by former Worcester Warriors chief executive Jim O’Toole aiming to buy the troubled Premiership club. “Atlas SportsTech was built upon the ethos that sport can change lives for the better... so let’s make that the reality again at Worcester Warriors,” chief executive James Sandford said.
CONFIRMS MCLAREN DEPARTURE
Bazball unravelled at the home of cricket on the first occasion that Stokes’s team proved unable to swat, bash and wallop their way out of trouble. It cemented some of the worries raised when the captain and head coach were appointed – that eventually the buzz of replicating quick-fire cricket in Test matches would fade away. If England start well today and go on to win, it will be testament to them backing their processes. And if one thing is for certain about this set-up, it’s that they’ll continue to back themselves and be honest about where they are.
“The address after the game was, ‘look, lads, you have obviously not performed anywhere near the capabilities we want to and we know we can, but it's not something that we are going to take backward steps from’,” Stokes added.
SWOOP
HONESTY THE TEST POLICY
Daniel Ricciardo will leave Formula 1 team McLaren at the end of the season, it was announced yesterday. The Australian’s departure was “mutually agreed” according to the team, who added that they had anticipated the move. Formula 2 champion Oscar Piastri is expected to take Ricciardo’s seat.
