Thursday 23 February 2023

THURSDAY’S THE NEW FRIDAY START PLANNING FOR THE WEEKEND WITH OUR GUIDE P20

INFLATION TO ‘FALL TO 2%’ BY DECEMBER

CITY ANALYSTS RECKON LOWER ENERGY PRICES COULD SEE BANK OF ENGLAND BACK AT TARGET BY END OF 2023

JACK BARNETT

INFLATION in the UK is on track to fall exactly back to the Bank of England’s target by the end of this year, according to forecasts by two top City of London economists.

The rate of price increases will tumble to two per cent in the final three months of 2023, according to Pantheon Macroeconomics.

By November, the firm reckons the cost of living could even tip just below the two per cent threshold to 1.9 per cent before bumping up two per cent in December.

A colossal unwinding in international energy prices after they surged to record highs last summer, pushed higher by Russia’s invasion of Ukraine rocking global oil, gas and electricity prices, is poised to drive UK inflation rapidly lower this year.

Bank of England economists are less optimistic about the

inflation outlook, forecasting it will more than halve to around four per cent by Christmas, still more than double their two per cent target.

Separate projections by investment bank Citigroup chimed with Pantheon’s predictions. They suspect inflation is on track to slip to 2.3 per cent in November.

If the pair’s bets do play out, it would unfold one of the fastest inflation declines ever, stumbling from a peak of 11.1 per cent in October. The rate has already dropped for three straight months to 10.1 per cent.

Britain is on the brink of slipping

into a recession, ignited by households and businesses responding to inflation eroding their finances by cutting spending, which should put downward pressure on prices.

Ten successive rate rises, approved by Andrew Bailey and the Bank’s Monetary Policy Committee, have put the interest rate at four per cent –enough to chill economic activity. The next meeting of the Committee is on 23 March. A faster than expected inflation drop is set to lower government spending on servicing the UK’s debt pile, which is nearly 100 per cent of GDP. A big chunk of the debt stock is tied to the retail price index, an old measure of inflation.

Numbers from the Office for National Statistics this week revealed the UK has borrowed around £30bn less than the Office for Budget Responsibility projected, helped by a more than £5bn fiscal surplus last month.

MARK KLEINMAN THE COLUMN THAT GETS THE CITY TALKING P6

THE UK government will today publish a long-awaited white paper on its plans for an independent regulator for English football.

The policy document will propose the introduction of a regulator tasked with stopping financial failings from occurring lower down in the pyramid, as well as a stronger owners’ and directors’ test.

Fans will be given a greater say in how clubs

are run, while there will be powers to stop teams joining European Super League-style breakaways.

It follows recommendations made by Tracey Crouch MP after her football governance review.

“Despite the success of the sport, we know that there are real challenges which threaten the stability of clubs,” Prime Minister Rishi The body will cover the football pyramid.

LEAGUE REACTION: P24

Hargreaves Lansdown boss: UK still not a nation of risk-taking investors

EXCLUSIVE

CHARLIE CONCHIE

THE UK is not yet a nation of investors and Brits’ appetite for the markets still lags well behind the US, the chief of Hargreaves Lansdown has said.

In an interview to be published

on City A.M.com today, the retail investment platform’s outgoing boss Chris Hill said investor confidence had been curtailed by historic turbulence in the past 12 months but Brits’ longer term taste for investment was still subdued.

“If you contrast the UK with the US, they've got the biggest stock

market in the world, and you can see the impact [of that] on the national psyche and how they think about investing. We are moving that way, but much, much slower,” Hill said.

“If you talk to a taxi driver in New York, they know about stock prices,” he added.

Hill said that financial firms were sensing a shift among Brits, however, and money managers were now looking towards amateur investors as a potentially deep pool of capital.

“In the past, if you talk to the asset manager [about their] clients, it was very

much about pension funds. Whereas if you talk to them now, they recognise the power of retail money,” he said.

The comments come after the investment platform reported a 30 per cent slowdown in net new business for the first half of the year last week, though profits were up.

MATT HARDY

POLITICAL FOOTBALL A new regulator on way for beautiful game

STANDING UP FOR THE CITY

A new referee for football won’t limit game’s commercial success

THIS paper of free markets and liberal economics may not, you might think, be in favour of a new regulator. But a new referee for the business side of the beautiful game is not one to be dismissed out of hand. At first principles, the best results for consumers tend to occur from freer markets. Competition drives prices down and quality up, so the argument goes. But even those free markets occasionally need a watchdog; for all the many

THE CITY VIEW

frustrations created by the FCA or Ofgem or whoever else, few genuinely believe markets should operate without some sort of arbiter. By ensuring there is a level playing field –ideally with only as many rules as absolutely necessary –the best performers

can still thrive. But what of a busted market, like English football? Our columnist Paul Ormerod argued yesterday that the incentives –spend big, win big, and to hell with the consequences –mean that a regulator is unlikely to stop the excesses of modern football. Fan ownership may even exacerbate them without board members willing to say ‘no’. On matters of ownership and ‘heritage assets’, the English Football League and

the Premiership of course already have the powers to stop ‘unfit’ owners taking charge of community clubs, albeit those powers are left largely unused. Should a regulator step in to stop a community club, with new ownership, pursuing promotion at all costs –only to fail to do so, and risk a century-long institution going pop as a result? Instinctively, it doesn’t seem so –just as it wouldn’t have been right for regulators to stop the

OFF THE RAILS With no resolution imminent, London Underground drivers yesterday confirmed that more industrial action will go ahead next month on budget day, 15 March

Britain passing up £18bn economic boost due to ‘failure’ to build enough homes

JACK

BRITAIN is passing up on a near £18bn economic boost due to the government and businesses’ “failure to build enough new” homes, a former Tory housing minister has claimed today in a new report.

Brandon Lewis, ex-housing and planning minister, in a foreword to a report by think tank Policy Exchange said decades of weak housing supply has taken its toll on families “in the form of higher house prices, higher rents and higher monthly mortgage repayments”.

Delivering an extra 100,000 homes each year could grow the UK economy by £17.7bn and make the “British dream” of homeownership a closer reality, he added.

Gross domestic product would receive benefits beyond greater construction output, the report said, via stronger productivity gains funded by more evenly distributed investment and higher employment.

Under the 2019 Conservative election manifesto, Rishi Sunak must deliver an additional 300,000 new homes each year by the middle of the current decade. He is poised to miss that goal.

A shortage of homes in the UK has put upward pressure on house prices for years, pricing potential buyers –often younger people with relatively lower deposits –out of the market.

Over the last decade, UK house prices have climbed 74 pear cent, according to the Office for National Statistics, up to £294,328 from £168,842. In London, they have increased to £543,098 from £313,744 over the same period.

On top of sky-high prices, the Bank of England has hiked interest rates 10 times in a row to tame a 40-year high inflation surge, lighting a rocket under mortgage costs.

aggressive management of RBS risking that historic brand with runaway, pre-2008 growth. But football is different. The top of the game still needs the bottom of the pyramid; Harry Kane spent time playing for Millwall and Leyton Orient before establishing himself in the Spurs and England team. Money has to flow down, too. Sustainability matters. A light-touch regulator may ensure the football-playing goose keeps laying the golden eggs.

WHAT THE OTHER PAPERS SAY THIS MORNING

THE DAILY TELEGRAPH

HUNT’S TAX RAID IS ‘DRASTICALLY ANTIINVESTMENT’, WARNS BT Chancellor Jeremy Hunt will send Britain in a “drastically anti-investment direction” if he forges ahead with a planned increase in corporation tax, BT has warned.

THE GUARDIAN TESCO AND ALDI JOIN ASDA AND MORRISONS IN RATIONING SALAD

Tesco and Aldi have joined Asda and Morrisons in rationing certain fresh produce lines as shortages of salad crops hit the UK. They both announced they were rationing sales of peppers.

THE FINANCIAL TIMES

MAJORITY OF FED OFFICIALS BACKED QUARTER-POINT RATE RISE IN FEBRUARY

The vast majority of Federal Reserve officials supported slowing the pace of US interest rate rises to 0.25 percentage points last month, according to an account of their most recent meeting.

British Steel: 260 jobs at risk with coke oven closures

JESSICA FRANK-KEYES

BRITISH Steel yesterday announced 260 jobs are at risk amid proposals to close its coke ovens at its plant in Scunthorpe.

The firm said the UK remains “uncompetitive” compared to rival markets with energy and carbon costs “some of the highest” globally.

It said it had seen a £190m rise last year and the facilities were “reaching the end of their operational life”.

A spokesperson for the firm, owned by Chinese steelmaker Jingye after a £1.2bn buyout in 2020, said

“decisive action” was needed to tackle surging inflation and improve green transition.

The announcement came just months after auditors Mazars resigned in a dispute over fees for its services.

Officials are set to fly to China this week amid talks over a state bailout, with Sky News reporting a possible £300m grant could take the government’s support to £1bn.

British Steel chief executive Xifeng Han said steel was “vital to modern economies” and demand was set to rise.

BARNETT AND ELENA SINISCALCO

Lloyds investors left disappointed by 2023 forecast

CHRIS DORRELL

LLOYDS Bank yesterday reported that higher interest rates offset the money set aside to cope with loan defaults during the final quarter of 2022, but disappointed the market with yet more conservative guidance on net interest margin for 2023.

Lloyds recorded a pretax profit of £1.8bn during the quarter, in line with company-compiled consensus and over 80 per cent higher than the same quarter last year.

The bank’s profit for the full year 2022 totalled £6.9bn, roughly flat on the previous year while revenue in the final quarter climbed to £5bn, mainly as a result of higher net interest income.

On the back of the results, Lloyds said it will pay a final dividend of 1.60p per share, bringing the total dividend to 2.40p per share, up 20 per cent on last year.

The bank also announced a buyback programme worth £2bn.

After a decade of ultralow interest rates, sharp

Wood Group confirms takeover bid from US private equity firm Apollo

CITY A.M. REPORTER

ENERGY services company John Wood Group yesterday confirmed it has received multiple takeover offers from US private equity firm Apollo Global Management, but has rejected all of them.

unsolicited, preliminary and conditional proposals” from the company “regarding a possible cash offer to acquire the entire issued and to be issued ordinary share capital.”

It said the most recent offer from Apollo, received on 26 January, was for 230 pence per share.

hikes throughout 2022 have widened banks’ net interest margins and earned them bumper profits. Net interest margin is the difference between what banks pay and receive in interest.

Lloyds posted 2.94 per cent across the year as a whole and 3.22 per cent in the final quarter, higher than expected.

Meanwhile Lloyds set aside £465m in impairment costs – more than expected – this was more than offset by the bank’s strong revenue figures.

Banks set aside loss provisions in order to cushion losses on loans when economic conditions darken. CEO Charlie

Nunn said the bank forecasts a “mild recession” in 2023, but said it will still be “meaningful” for customers.

Despite the funds set aside for impairments, CFO William Chalmers said there has only been “modest evidence of deterioration in credit”.

Net interest margin has been a crucial feature of this earnings season, particularly banks’ forecast for how it will change in 2023.

TRACK AND TRACE Royal Mail chief exec Simon Thompson gets grilled in Parliament

ROYAL Mail boss Simon Thompson yesterday answered questions in the House of Commons responding to claims that the delivery company used digital tracking devices to make workers work faster. Thompson claimed their purpose was to balance the workload.

JP Morgan traders restricted from using ChatGPT over privacy issues

ANNA MOLONEY

CITY FIRMS including JP Morgan and KPMG have restricted their employees from using ChatGPT, according to reports, as privacy concerns grow around the use of AI.

Privacy concerns over the sharing of sensitive financial information has prompted JP Morgan to curb the use of the AI chatbot by traders, according to The Telegraph.

Meanwhile other firms such as

Accenture have told their staff to be careful with how they use the technology, while UK Finance said it was discussing the topic with its members, The Times reported.

A recent JP Morgan survey showed AI is set to transform trading, with over half of traders predicting AI will be the most influential technology over the next three years. However, its potential has been met with equal concern, with the tech expected to come under new regulation within the Online Safety Bill.

The FTSE 250 firm came out to confirm speculation of a takeover, stating that it has received “three

Wood Group said it had “considered” each offer and engaged with Apollo “on a limited basis”.

But the energy services firm said the board “unanimously rejected” each of the offers after it concluded they “undervalued” the company. Apollo was contacted for comment. News of the offers marks the second tilt at a London-listed firm by a US private equity house this week, after events business Hyve revealed it had received an offer from Rhode Island-based Providence.

Lloyds boss Charlie Nunn: “mild recession”

Top UK investment body slams FCA for jumping the greenwashing gun

CHARLIE CONCHIE

A TOP investment body has slammed the UK’s financial services regulator for moving too fast on environmental, social and governance (ESG) rules yesterday. Officials at the Financial Conduct Authority (FCA) announced plans in October to clamp down on the labelling of ESG financial products

in a bid to stamp out rampant greenwashing by investment firms.

Under the proposals announced in October, firms will be forced to justify labels like ‘ESG’ and ‘green’.

However, Chris Cummings, boss of the Investment Association, told MPs in a select committee hearing that the regulator was looking to concertina the regulatory progress into a year.

“Of course we should start, but

please let’s not impose the end state before we’ve been through the transition,” Cummings told the Treasury Select Committee. However, the FCA’s director of ESG Sacha Sadan hit back at the criticism, saying it was integral that investors knew what went into the products they were buying. Creating guardrails would help investors already buying the products, he told MPs.

UK could trail US and EU in green race, MPs warn

NICHOLAS EARL AND JESSICA FRANK-KEYES

MPS ARE piling pressure on the government to compete with rival markets for green investment amid growing concerns the UK could lose out to the US and EU unless it offers a more attractive investment climate for renewable projects.

Philip Dunne, Conservative MP and chairman of the environment audit committee, urged ministers to “act now” to ensure the UK’s global net zero standing was not “eroded” by companies heading overseas.

“Other countries are offering impressive incentives for investment. The UK risks losing immense talent if it fails to make the UK an attractive place for innovators to invest and spur green growth,” Dunne told City A.M.

This follows the passing of the US Inflation Act last summer, including Biden’s $391bn (£324bn) clean energy package –the largest raft of federal climate laws in history – while the EU has vowed to soften state subsidy limits.

Conservative MP Alexander Stafford said the UK could not become complacent.

“There are elements of these funding regimes that the UK should also look to emulate,” he said.

Peter Aldous, another Conservative MP, argued Biden’s legislation had “accelerated the global race to net zero” and posed a “challenge” to UK competitiveness.

Jonathan Reynolds, Labour’s shadow business and industrial strategy secretary, said: “At a time when we should be attracting investment, sadly too many firms are choosing to go elsewhere because the government is failing to offer the stability business needs to thrive.”

The MPs warnings come after industry bodies warned last week the UK was in jeopardy of missing its climate pledges without a plan to rival the US and EU.

Nascent green energy firms such as Sunfire and Zenobe told City A.M. last month they are considering pivoting projects to the US, attracted by its subsidy regime.

Hunt recently described the new US subsidies as a “very real competitive threat” and announced the government would respond in the “next few months”, but warned it wasn’t going to be easy for the UK to match the US.

FUTURE’S BRIGHT Former Buzzfeed exec tapped as new CEO of media giant Future

FUTURE, the media company which owns brands including Marie Claire and Gocompare, has named former Mail and Buzzfeed exec Jon Steinberg as its new chief executive. Steinberg will replace Zillah Byng-Thorne, who resigned last September following a decade at the firm, from 3 April.

Rio Tinto slashes dividend as rising commodity prices hit mining giant

NICHOLAS EARL

HIGHER energy costs, inflation, and downward pressure on commodity prices has weighed on profits at multinational miner Rio Tinto, which has slashed its dividend amid faltering demand.

Underlying earnings have dropped 38 per cent to £11bn ($13.3bn), with the Aussie commodities giant bludgeoned by lower prices for iron ore and copper, bearing the brunt of

higher energy and raw materials prices on operations, alongside higher rates of inflation.

Net cash generated from operating activities was also 36 per cent lower than 2021, coming in at £13.3bn ($16.1bn) .

The company was exposed to a higher US tax rate of 30.9 per cent compared with 27.7 per cent in 2021. This increase was primarily due to the $800m write down of deferred tax assets in the US.

MARK KLEINMAN

BREAKING BUSINESS STORIES AND ANALYSIS

Politics at play in battle over British Steel future

IWAS not wrong a few weeks ago when I wrote here that sorting out Britain’s financially troubled steel industry would ultimately be someone other than Grant Shapps’ mess to clean up. What I didn’t anticipate then was that, just a month later, Kemi Badenoch would become the fourth business secretary in six months given the mandate to deliver a taxpayer-funded decarbonisation package.

Handing out public money appears a harder task than it should be. Officials from Badenoch’s department were due to fly to China this week to convince Jingye Group, the owner of British Steel, that a £300m grant and a substantial energy subsidy was an act of genuine benevolence on the part of the UK government.

The message does not seem to be getting through.

Hundreds of job cuts at the company’s Scunthorpe plant, with hundreds more to follow, arrived yesterday despite a moratorium on redundancies being one of the conditions of government funding. That implies the Chinese conglomerate is either playing a risky game of brinkmanship, or is so underwhelmed by the government’s offer that it is ploughing on with its own restructuring regardless.

FRESH from low-level disgruntlement about the £1.1m package handed to Chris Cummings (right), chief executive of the Investment Association (IA), a number of the trade body’s members have been in touch –this time to gripe about fee increases.

The IA’s subscription fees are based on a firm’s assets and funds

under management, fixed by a committee of members and then signed off by its board. This year’s increases were, a spokeswoman points out, below headline inflation rates despite the burden on the IA to respond to an intense regulatory environment.

“British Steel has a crucial role to play in ensuring the UK has its own supply of high-quality steel. To make sure we can deliver the steel Britain requires, we’re undergoing the biggest transformation in our 130-year history,” CEO Xifeng Han said yesterday.

When Shapps and Michael Gove, the levelling up secretary, wrote to Jeremy Hunt some weeks ago to warn that, without public money, British Steel did not have a viable business, they effectively tied the Chancellor’s hands behind his back.

A similar offer has been made to Tata Steel, British Steel’s larger rival, but it is unclear whether the Indian group finds the proposal any more attractive.

Government officials may end up feeling they have played a weak hand badly.

Both Jingye and Tata look well-placed to extract more public money, with fewer binding conditions, than ministers would like.

The alternative, as they are painfully aware, would be another industrial jobs bloodbath, and that would do little for the Conservatives’ already-shaky general election prospects.

Moreover, she adds, membership has increased, with a higher percentage of full fees delivered earlier this year

“Feedback from our members demonstrates that they highly

rate the support the IA provides and strongly believe that our organisation has a positive influence on policy and regulatory issues,” she says.

Nevertheless, I suspect that those who grumbled about Cummings’ pay last year will be keeping a close eye on it again in 2023, given their views on its fee hikes.

Freetrade’s future might be best in Lloyds’ stable

IT’s been over two months since I queried the fate of Freetrade, the stock-trading app which appears to have struggled to win over new investors at a hoped-for valuation of £700m in late 2021. At that time, I wrote that talks with JP Morgan, the Wall Street behemoth, were unlikely to result in a transaction – and the absence of news since then seems to corroborate that theory. Other talks with Monzo, the app-based bank, also proved fruitless. So here’s a tip for Adam Dodds, founder of the somewhat-sensitive fintech: engineer a sale to Lloyds Banking

Group instead. Freetrade would provide the kind of innovative consumer interface lacking at the front end of Lloyds’ and other established high street banks’ apps.

For Charlie Nunn, Lloyds’ still relatively new chief executive, it would act as a ready-made solution to the rather clunky share-dealing platform it currently operates. And as Nunn takes the UK’s biggest high street bank deeper into the mass

affluent segment that he outlined in his strategy update a year ago, it might be a cheap way to jumpstart its ambitions in the investment area.

Yesterday’s underwhelming results and forward guidance from Lloyds emphasises the need for a spark of inspiration.

One obstacle to a deal (involving Lloyds or any other would-be suitor): how cheap a price are Dodds and his institutional shareholders, which include the listed venture capital investor

Molten Ventures and LVMH-backed private equity firm L Catterton, prepared to accept?

A Freetrade spokesman says there is “no update” on the company’s future. Just as with struggling UK fintechs like Railsr, the embedded finance business which briefly aspired to a sustained unicorn valuation but has now been left scrambling to find a buyer to salvage its future, the absence of concrete news about a takeover frequently bodes ill.

I’ll look forward to Freetrade proving me wrong – whether that’s in tandem with Nunn or an alternative new owner.

Fees the latest gripe for IA members after chief exec pay boost row

FTX: UK investors report losses of £2m to police

CHARLIE CONCHIE

THE AMOUNT of lost cash reported by UK investors following the collapse of crypto exchange FTX has swelled to nearly £2m as burnt traders turned to the police in the hope of recovering their money, City A.M. can exclusively reveal.

A freedom of information (FOI) request revealed that City of London police were talking to 32 people who lost £1.9m after the collapse of Sam Bankman-Fried’s Bahamas-based exchange, which imploded in early November amid a rush by customers to withdraw cash from the platform.

The FOI request by trading website Investing Reviews showed how one UK-based trader spoken to by police lost over £1m in the firm’s collapse. Police said the youngest victim was a teenager, while the oldest was in their seventies.

Bankman-Fried is facing wire fraud charges in the US over the alleged use of customers’ money

Taxpayer stake in Natwest reduced again as government sells shares

HOLLY WILLIAMS

THE TAXPAYER’s stake in Natwest has been reduced again after the government offloaded another tranche of shares in the banking giant.

to fund his sister trading outfit Alameda Research. Two of his top lieutenants –Alameda chief Caroline Ellison and FTX co-founder Gary Wang – have already pleaded guilty to wire fraud.

Insolvency teams overseeing the winding up of FTX have reportedly recovered over $5bn in assets but the full scale of consumer losses are not yet clear.

The chief of Investing Reviews Simon Jones said the losses so far reported by UK customers are likely to “just be the tip of the iceberg”.

“The Financial Conduct Authority has been at pains to warn investors about the dangers of cryptocurrency, so if you’re tempted, make sure you don’t put all your eggs in one basket,” Jones warned.

The watchdog has repeatedly warned consumers that they should “be prepared to lose all their money” when backing digital assets while ministers recently granted regulators more powers to clamp down on the sector.

Bankman-Fried’s illfated FTX burnt a lot of UK investors

GO WEST Earls Court Development Company reveals plans to transform 40-acre area

The Treasury’s stake in Natwest has been cut to 42.95 per cent from 43.97 per cent after the move which is part of its ongoing

programme to sell down its stake.

It has sought to place more of the bank in private hands after the lender was bailed out at the height of the 2008 financial crisis with £45bn of taxpayer cash.

In March last year, Natwest confirmed it was majority owned by private investors in a milestone for the recovery of the business.

Shares in the bank have risen by

22 per cent over the past six months, while it also revealed last week that profits surged by more than a third to reach £5.1bn last year.

It handed its boss an annual bonus for the first time since the bank’s bailout by the government in 2008. Natwest likewise offered cheer for investors as its unveiled plans for a £800m share buyback and a big hike in dividends.

THE AMBITIOUS redevelopment will see this neglected, mostly derelict 40-acre site in Zone 1 London redeveloped with plans for a park bigger than Trafalgar Square, a variety of community venues and 4,500 new homes. It expects to create 15,000 new jobs in the area.

MICROSOFT TO BRING CALL OF DUTY TO NVIDIA IF DEAL STRUCK

Microsoft has struck a 10-year deal to bring Call of Duty and other Activision games to Nvidia’s gaming platform if the Xbox maker is allowed to complete its much-contested $69bn (£57bn) acquisition of Activision. Regulators and competitors like Sony have come out hard against the proposed Microsoft-Activision tie-up, with Britain saying the deal could weaken rivalry between Xbox and Playstation ad stifle competition. The move may allay concerns by ensuring more ways for consumers to get games controlled by Microsoft. Microsoft President Brad Smith told a news conference on Tuesday he was now more optimistic of getting the Activision acquisition done after the Nvidia deal and a similar arrangement with Nintendo.

EU TO DECIDE ON GOOGLE’S ACQUISITION OF PHOTOMATH

EU antitrust regulators have set a 28 March deadline for their decision on Alphabet unit Google’s acquisition of Croatian maths app Photomath, according to a European Commission filing yesterday. The EU competition enforcer can clear the deal with or without remedies after its preliminary review or it can open a four-month long investigation if it has serious concerns. “We can confirm that we entered into an agreement to acquire Photomath in May 2022, subject to regulatory review,” a Google spokesperson said. Photomath’s app uses a smartphone’s camera or scientific calculator to recognize and explain symbolic math problems. Menlo Ventures, Learncapital, Goodwater Capital, GSV Ventures and Cherubic are investors in the company.

Sales at Actimel maker Danone reach £23.7bn

LAURA MCGUIRE

DANONE, the French producer of Actimel, saw its sales jump 14 per cent to €27.7bn (£23.7bn) in 2022 but warned that rising costs were eroding its profit margins.

Danone’s operating profit grew slightly to €3.4bn for the year, but the company said its profit margin fell by 15.4 per cent to 12.3 per cent due to a hike in costs.

Antoine de Saint-Affrique, chief executive of Danone, said the firm

Pubs ‘won’t stay afloat’ without energy bill help in Spring Budget

THE HOSPITALITY sector has warned that many businesses “won’t stay afloat” if the government does not look to provide extra support with soaring energy bills in its upcoming Spring Budget.

“The steep increase in utility costs is having a significant impact on our business, it’s now one of the largest costs to manage,” Simon King, who is founder

of Igniting Hospitality and also runs The Victoria, a pub in Surrey, told City A.M.

Ahead of the budget on 15 March, he is now calling for greater support, either through subsidies or business rate relief.

“Unfortunately without some government intervention, it is likely that many businesses small and large won’t survive,” he said.

The plea comes as the government revealed it is set to reduce the amount of

relief it provides businesses in relation to energy bills in April.

The support will only apply to 70 per cent of energy used by businesses, while also raising the threshold in energy costs for when support kicks in.

Anthony Ainsworth, chief operating officer at Npower Business Solutions, was also concerned the scaled-back package could leave businesses exposed. To help ease bills, he called on the

government to “double down” on helping firms reduce their energy consumption through greater energy efficiency.

“More support is needed now,” Ainsworth told City A.M. “We are working closely with our customers to help them implement the most effective energy strategy over the coming months, but we know that more incentives to help businesses reduce energy demand would be hugely welcome.”

LAURA MCGUIRE AND NICHOLAS EARL

As Sunak tries to unite Tories on Northern Ireland, Starmer preps five missions no one asked for

YOU always know Rishi Sunak means business when he wears his glasses to Prime Minister’s Questions. And lord knows, everyone else will be examining his sentences with eagle eyes for a hint of when a new Northern Ireland Protocol will be agreed, and what it will say when it is.

For once, he thought Keir Starmer might be sympathetic to his current plight – his own backbenchers.

Instead, the Labour leader gleefully aired their grievances from the opposite benches.

After reminding him what a kerfuffle the rules governing Northern Ireland’s borders have already been, Starmer had the nerve to also point out how many nutters there are on his backbenches, even after he made one of them the deputy chair of the Conservative Party.

“The Prime Minister is biting his tongue, but at some point the irreconcilables on his benches are going to twig and they’re going to come after him,” Starmer said.

“The former trade minister says there can be no role for the European Court of Justice in Northern Ireland, so will the Prime Minister be honest with him, and tell him that’s not going to happen?”

What Sunak no doubt wanted to say was: “Quite a thing for the man constantly evoking the spirit of Tony Blair to lecture me on honesty.”

But, Starmer was right, he was biting his tongue and couldn’t quite free it from the pincer grip the DUP had put it in.

SKETCH Sascha O’Sullivan

“For the honourable gentleman to be talking about a deal, that he hasn’t even seen, that we are still negotiating, that isn’t finalised,” Sunak – glasses on – told Starmer – glasses off.

“It’s not my questions he’s avoiding, it’s their questions he’s avoiding,” replied the Labour leader, going to gesture towards Lee Anderson, before remembering the death penalty supporting MP was now a member of the government.

Thankfully, Sunak hit his stride, skewering Starmer with his indecision over Brexit as a reformed support of a second referendum, just as the unhelpful sod promised to help him get a new deal through the Commons.

“Tomorrow, we’ve heard, [Starmer] will announce five missions. We already know what they are: it’s uncontrolled immigration, it’s reckless spending, it’s higher debt and it’s softer sentence and for the fifth pledge it’s that he reserves the right to change his mind on the other four,” Sunak yelled at Starmer, just as Suella Braverman frantically texted him to say the Home Office had forgotten to put illegal immigration on their list of priorities too.

Public services weak despite 70-year tax high

JESSICA FRANK-KEYES

UK PUBLIC services can no longer match people’s expectations despite the tax burden being on course to hit a 70-year high, a think tank report has warned.

Government decisions to date have done “little to shift the dial”, the Institute for Government (IfG) and CIPFA warned today in their latest performance tracker on the state-run sector.

It comes as the UK is forecast to see taxes as a share of GDP hit a postWWII high in 2025 under current policies to help pay for a borrowing surge to cope with the economic fallout of the pandemic.

The document looked at the state of services across GP practices, hospitals, adult and children’s social care, local councils, schools, police, courts and prisons.

Researchers found funding increases in the government’s autumn financial statement were not high enough to return services to their pre-pandemic

Hunt will deliver the budget on 15 March

levels before the next election.

Meanwhile the government’s strategy on widespread industrial action by communications, postal, rail and public sector staff has “exacerbated existing staffing problems”, the report warned.

However, after Office for National Statistics numbers confirmed the UK had borrowed £30bn less than the Office for Budget Responsibility forecast in November, Rishi Sunak and Jeremy Hunt are reportedly exploring a five per cent pay rise for workers in a bid to end the walkouts.

IfG director Nick Davies said: “Covid19 recovery has been hampered by the government’s counterproductive strikes strategy, with substantially below inflation pay offers exacerbating the serious workforce problems.”

Jeffrey Matsu, chief economist at CIPFA, added: “The quality and breadth of services that people have come to expect no longer matches what the public purse can afford – despite taxes at a 70-year high.”

No10 has been approached for comment.

Peugeot owner’s profit up 26 per cent as it looks to rule EV market

CITY A.M. REPORTER

CARMAKER Stellantis reported a 26 per cent increase in net profit for the year as the Peugeot owner sought to dominate the electric vehicle (EV) market.

Net profits at Stellantis, which produces Citroen, Fiat and Peugeot car brands, rose to €16.8bn (£14.8bn) for 2022, while net

revenues jumped 18 per cent to €179.6bn.

On top of delivering a strong financial performance for the year, the company’s chief executive Carlos Tavares said the firm “also demonstrated the effectiveness of our electrification strategy in Europe”.

Tavares said the company now hopes to roll out that same strategy in North America.

“We now have the technology, the products, the raw materials, and the full battery ecosystem to lead that same transformative journey in North America, starting with our first fully-electric Ram vehicles from 2023 and Jeep from 2024,” he said. The company also approved a share buyback program of up to €1.5bn, and said it will distribute €2bn to its staff around the world.

China’s top state firms told to cut ties with Big Four

LOUIS GOSS

CHINA has told its state-owned companies to stop working with the Big Four auditors – EY, KPMG, PwC, and Deloitte –and asked them to use local accounting firms instead.

China’s Ministry of Finance (MoF) has called on the country’s state-controlled firms to let their audit contracts with the Big Four expire, Bloomberg reported yesterday.

The MoF has instead asked state-owned entities to begin using local Chinese or Hong Kong-based auditors when contracts next come up for renewal.

State-controlled companies’ overseas subsidiaries will, however, continue to be allowed to use the Big Four audit firms to review their accounts.

All of the Big Four firms have local Chinese subsidiaries with multiple offices throughout the country, with revenues in the country growing over the past decade.

The world’s top four accounting firms generated ¥20.6bn (£2.5bn) worth of revenues from their Chinese clients in 2021,

ANNOUNCEMENTS

according to MoF figures, meaning the move will likely come as a blow to the Big Four.

EY, PwC, and KPMG declined to comment on the report, while Deloitte did not immediately respond.

The new guidance from the Chinese government follows a landmark deal agreed between Beijing and Washington in August last year, which lets the US’s accounting watchdog inspect audits of Chinese companies listed in the US. US regulators had previously only had access to Chinese and Hong Kong audit papers if they were granted it by the China’s financial watchdog, the China Securities Regulatory Commission. China’s financial watchdog had previously expressed concerns that giving US regulators access to audit papers would reveal the country’s state secrets. However, the deal was agreed after the US threatened to begin delisting Chinese companies in 2024 if the Public Company Accounting Oversight Board continued to be blocked from accessing audit information.

LEGAL AND PUBLIC NOTICES

CITY of LONDON

Bevis Marks

McKinsey to cut up to 2,000 jobs in record layoff

LOUIS GOSS

MCKINSEY is planning to cut up to 2,000 back-office staff as it seeks to control costs and retain its partner payouts. The plans could affect up to 2,000 of McKinsey’s 45,000 staff, in one of the consulting firm’s largest rounds of job cuts ever.

McKinsey’s plans, first reported by Bloomberg, are set to see the firm cut swathes of back-office workers in its communications, technology and human resources departments.

A McKinsey spokesperson told City A.M. the firm is “redesigning the way our non-client serving teams operate for the first time in more than a decade”.

The company spokesperson noted that McKinsey, however, will “continue to hire client-serving professionals and invest in our ability to serve clients”.

The cuts will also steer clear of McKin-

ANNOUNCEMENTS

sey’s legal and compliance departments, which have been bulked up in the wake of scandals including links to corruption in South Africa and the US opioid crisis.

Labour shortages have also forced the consulting firm to increase partner pay in an effort to prevent talented staff being pinched by rivals offering bumper pay packets.

First established in 1926, McKinsey is now considered to be one of the world’s ‘Big Three’ consulting firms, alongside Bain & Co and Boston Consulting Group.

The firm took in a record $15bn (£12.4bn) revenues in 2021 off the back of a boom in demand for consulting services, leading to bumper payouts for its more than 2,000 partners.

News of McKinsey’s plans follow reports that KPMG is set to lay off 700 US staff, due to the impact of a slowdown in M&A activity on its deals advisory business.

LEGAL AND PUBLIC NOTICES

CITY of LONDON

Hart Street, Mark Lane, Northumberland Alley and Pepys Street – Amendments to the waiting and loading restrictions.

The City of London (Waiting and Loading Restriction) (Amendment No. 6) Order 2023

The City of London (Parking Places) (Amendment No. 16 Order 2023

1. NOTICE IS HEREBY GIVEN that the Common Council of the City of London on 22nd February

1984.

2. The effect of the Orders would be in:

(a) Hart Street to:-

(1) extend the existing ‘at any time’ waiting restrictions on the north side westward across the junction with New London Street;

(2) introduce ‘at any time’ waiting restrictions on the south side opposite New London Street;

(b) Mark Lane on:-

(1) the west side:-

(A) to introduce ‘at any time’ loading restrictions from opposite London Street to opposite No. 61; and

(B) to extend the existing ‘at any time’ waiting restrictions opposite Nos. 61 to 63;

(2) the east side:-

(A) to introduce ‘at any time’ waiting restrictions on the south side of the junction with London Street;

(B) to introduce ‘at any time’ loading restrictions outside Nos. 61 to 63;

(C) to revoke the four payment parking places outside No. 70 and revert this to ‘no waiting 7am – 7pm Monday to Friday and 7am – 11pm Saturday, any such day not being Christmas Day, Good Friday or a Bank Holiday’.

(c) Northumberland Alley to introduce ‘at any time’ waiting restrictions at the junction with Crutched Friars.

(d) Pepys Street to introduce ‘at any time’ waiting restrictions at the junction with Cooper’s Row.

3. The City of London, having given Notice on 17th November, 2022, will also introduce on 3rd April 2023 road humps under section 90C of the Highways Act 1980 at those locations previously advertised.

4. Copies of the proposed Orders, which will come into operation on 2nd March 2023, of the statement of reasons for making the Order and a plan showing the affected streets can be found on the City of at the Planning Enquiry Desk, North Wing, Guildhall, London, EC2P 2EJ may be viewed during

5. Any person desiring to question the validity of the Orders or of any provision contained therein on 1984, or that any of the relevant requirements thereof or of any relevant Regulations made thereunder has not been complied with may, within six weeks from the date on which the Orders are made, make an application for the purpose to the High Court.

Dated 23rd February 2023

Ian Hughes Director, City Operations

Firms must act now to deliver new consumer duty, says FCA official

VICKY SHAW

FIRMS must act now to prepare for a new consumer duty, a boss at the City regulator has said.

Sheldon Mills, executive director of competition and consumers at the Financial Conduct Authority (FCA), told firms yesterday: “You still have time to deliver. But you must act now.”

The consumer duty will set clearer and higher standards of consumer protection across financial services, requiring firms to put customers at the heart of what they do.

The rules come into force on 31 July for new and existing products or services that are open to sale or renewal, and 31 July next year for closed products or services.

Mills said: “Our work on the

consumer duty predates the cost of living squeeze but the current economic climate highlights the need for those high standards and protections.”

“Hard economic times hit those at the bottom of the financial ladder the hardest, so the duty does carry responsibility to look out for customers with vulnerabilities,” Mills said.

THE SQUARE MILE AND ME

FIRST MEMORY OF THE SQUARE MILE?

Scary, surreal, fascinating. Suits everywhere. Everyone seemed very important. The place closed at 8pm. No hotels, no gyms, no culture, yet everyone seemed very buzzed.

DID YOU FEEL QUALIFIED TO WORK IN THE CITY?

Not at all. I had a not very good degree in history and was working as a road sweeper. Someone gave me a break. I have never forgotten it. I went from road sweeper to risk trader in the space of 72 hours.

HOW DID YOU GET TO WHERE YOU ARE?

I came to London and to insurance without friends or connections. I was enquiring and wanted to be out in the field. I had confidence – I thought I could thrive at any level, which indeed most of us can, but knew that I would need to be constantly learning. With this in mind, I have always worked with inspirational leaders, patient clients and knowledgeable colleagues. To me, the oft quoted “you can see further by standing on the shoulders of giants” always made sense. I started in a broker with 18 people where I went out to buy the chairman cigars. Now I work in a broker that is a bit bigger. I don’t smoke.

MOST MEMORABLE LUNCH

Got to be going to lunch with Martin Williams at one of his “M” restaurants with Lawson Muncaster. The first time I have been served a drink by a robot.

FAVOURITE PUB

The Lamb / The Broker / anywhere in Leadenhall Market when I was younger. Nowadays, I must admit that Fortnum & Mason in the Royal Exchange can occupy me.

WHAT’S THE ONE THING YOU LOVE ABOUT THE CITY?

It brings together, like no other, the qualities of a financial training campus, a trading area and a client service model. If you are at the heart of it, you love the spontaneity and connectivity. At its core is trust, friendship and playing it long.

WHAT’S THE GREATEST RISK YOU’VE EVER TAKEN?

May 1984: moving from my small coastal town to London. No flat, no job, no connections and an overdraft – could’ve been tricky.

YOUR MOST EMBARRASSING MOMENT?

A few years ago, I fell off stage midspeech. Ever since, I’ve been available for children’s parties.

WHERE IS HOME DURING THE WEEK?

It tends to be in our flat, just south of the river. A twenty minute walk to Aon’s base at the Cheesegrater. It meant that when allowed I was in the office during much of the

pandemic. The only other people in the building were the security guards. I’d known their names before but now I know all their family stories and we’ve become good friends. They too like Fortnum & Mason.

WHERE WOULD WE FIND YOU AT THE WEEKEND?

Norfolk, by and large, but I love travelling. It may sound a bit sad, but I try to go to three new countries a year.

WHAT’S YOUR BOLD

QUICKFIRE ROUND

FAVOURITE...

FILM:

GOOD WILL HUNTING AND LOVE WITHOUT WALLS (I AM BIASED, YOU’LL KNOW WHY IF YOU SEE IT)

BAND:

CURRENTLY IT SEEMS TO BE DRAKE, ELBOW, FAT FREDDY’S DROP, TERENCE BLANCHARD AND THE PRETENDERS

ARTIST: ANYTHING DISPLAYED AT THE SAINSBURY CENTRE FOR VISUAL ARTS

DAY OF THE WEEK: FRIDAY NIGHT / SATURDAY MORNING

TEA OR COFFEE?: IS MOCHA ALLOWED?

PREDICTION FOR THE CITY IN 2023

We have the chance of a really exciting year ahead. Whilst we would need to show ourselves to be hugely sensitive to the wider cost of living challenges and illustrate the social purpose of what most of us who operate in the City have in their hearts today, we can play a massive part of putting the country on the front foot after years of sadness, chaos and crisis. Think of the Corporation of London Destination City programme, Lloyd’s’ work around the Sustainable Market Initiative and Blueprint Two, and Aon’s work in understanding and making better decisions around cyber, climate and intellectual property. We will have a fabulous DiveIn festival in September. We will return to work in greater numbers in a manner that is safe, rewarding and fun. All these will advance the Square Mile as a more dynamic, contemporary, relevant and inclusive environment. We might even say goodbye to suits and ties…

CITY FIGURE YOU MOST ADMIRE

I work and have worked with phenomenal leaders at Aon and Lloyd’s, but if I had to select one, it would be Tom Ilube –the tech entrepreneur and philanthropist. His work in DE&I has been extraordinary.

YOU’VE GOT A WEEK OFF, WHERE ARE YOU GOING AND WHO WITH?

Family. The Canadian Rockies is God’s country and the most beautiful place I’ve ever seen.

We ask the City’s great and good to share their memories –and their favourite pub. This week, it’s Dominic Christian, a City councilman and global chair of Aon’s reinsurance business

Connecting the Community

Time and place of the Spring Awakening event confirmed

THE DATEand venue of the much-anticipated Crypto AM Spring Awakening has been announced.

The event – the first of Crypto AM’s series of prominent gatherings across 2023 – will be held at The Mansion House, official residence of the Lord Mayor London, on Thursday March 30.

The theme of the Spring Awakening will be the ‘State of the Union of Crypto in the UK’, culminating in a prestigious three-course networking lunch in the magnificent surroundings of the historic Egyptian Hall.

A series of keynote speeches and talks are lined up, including ‘Digital Pound/CBDCs’, ‘Government Policy and Regulations’, ‘Appetite for the digitisation of real-world assets’, ‘Legal and Cybercrime’, ‘Impact of the SEC on the global custody world’, and ‘The Digital Divide’.

Hosting the Spring Awakening will be James Bowater – Crypto AM founder and editor-at-large – who believes the current mood of the crypto world presents a vital opportunity for the UK.

“With what we’re seeing going on in the US at the minute, it would appear the industry could well and truly shoot itself in the foot if things continue the way they are with the SEC on such a rampage,” James said.

“It’s time for London to seize the moment and, as Crypto AM approaches its fifth birthday, relentlessly banging the drum for joined-up thinking from the FCA and the Bank of England, we’re at the crucial point where we can confirm our status as

the number one destination for this industry.

“We’re inviting friends and colleagues – leaders in the industry – to tip their names into the hat to attend and engage in this discussion at our exclusive gathering.

“This is a carpe diem moment for the UK. Against the backdrop of Singapore, Dubai and the US as a whole, London really now needs to seize the day.”

Tickets for the event, priced £120, can be purchased by visiting https://www.cityam.com/cryptospring-awakening/. Only 100 places will be made available. Partnership packages are also available for both headline and general partners. To discuss partnership opportunities, contact james.bowater@cityam.com.

Three further exclusive networking

CRYPTO NEWS IN BRIEF

CHARLES BRONSON COLLABORATES ON NFT ART

THE man dubbed “Britain’s most dangerous prisoner” is to have his artwork sold as a series of NFT collectibles. Charles Bronson, who has spent 45 years behind bars, recently collaborated with Born Again Art and Crypto Correct to create the ‘Stay Sane’ NFT collection.

The 70-year-old inmate is no stranger to art, having received numerous awards for his works which often sell for thousands. The career convict even changed his name by deed poll to Charles Salvador in 2014 as a tribute to Salvador Dali – his favourite artist.

The Stay Sane NFT (non-fungible token) collection will be launched as a pre-sale this evening at Henarch Galleries in Spitalfield, then as a public sale on Sunday February 26.

SWARM LAUNCHES ON-CHAIN STOCKS AND BONDS

REGULATED blockchain platform

Swarm – winner of Crypto AM’s Outstanding Industry Contribution award 2022 - has launched a world-first public investment offering for Apple, Tesla, and two US Treasury Bonds on-chain.  The fully asset-backed tokens are on the Polygon blockchain and available to trade for both retail and institutional investors, with no minimum investment. Trading is available 24/7 and compliant under German regulation.

It is the first service of its kind accessing real world assets using digital blockchain technology, while meeting full regulatory requirements.

events and opportunities to rub shoulders with some of the UK’s leading lights in the digital world have also been planned.

These include ‘The Fifth Crypto AM Birthday Party and Summer Unlocking’ on June 21, the fourth ‘Crypto AM Summit and Awards’ from September 26 to 28, and the ‘Crypto AM Christmas Party’ on December 13.

Hong Kong rule change cheering crypto markets

ANOTHER strong week in the crypto markets, as investors continue to gain confidence after the maelstrom of bad news that accompanied the end of 2022.

The price of Bitcoin spiked above $25k for the first time since last June, though a failure to make a convincing move higher has since seen a pullback to below $24k. The flagship cryptocurrency was changing hands for around $23,700 yesterday, up five per cent over the last seven days.

The crypto rally has been primarily driven by Bitcoin’s strength, with second-

largest cryptocurrency by total value Ethereum lagging behind. This is considered a healthy signal from the market by analysts.

One of the standout performers this week has been Filecoin, which is up almost 50 per cent over the past seven days. Analysts suggest the hype around the launch of Filecoin’s FVM - anticipated to go live in March – is the reason. The Filecoin Virtual Machine (FVM) is a runtime environment for smart contracts on the Filecoin network, which should enable user programmability.

The past week generally has seen a growing narrative of Asian flows leading the market strength. This has erupted following signals of more positive crypto regulations in Hong Kong. Hong Kong has proposed a relaxation of rules banning retail investors from buying crypto from licensed platforms. Regulators are proposing that investors are allowed to buy large-cap cryptocurrencies. The latest is in line with officials aiming to position Hong Kong as a financial centre for digital assets. This narrative is not isolated to recent

positive regulatory news though, with Bitcoin seeing a healthy and stable uptrend during Asian hours since the November Bitcoin bottom with no notable downside days.

It’s a different story during US trading hours, which have been more erratic. Will that need to change to see a more significant spike in the crypto markets?

KEANU REEVES BACKING DIGITAL ASSETS

MATRIX star Keanu Reeves has said he believes in crypto, branding the principles underpinning it as ‘amazing’. Discussing cryptocurrency, metaverse and NFTs as part of an extended interview for the upcoming John Wick 4 film, the 58-year-old Canadian was full of enthusiasm for decentralised finance.

“I think the principle, the ideas behind an independent currency, are amazing,” he said.

“These are amazing tools for exchanges and distribution of resources. So to pooh-pooh crypto, or the volatility of cryptocurrency, it’s only going to make it better in terms of how it’s safeguarded.”

ALCHEMY SHOWING THE RIGHT CHEMISTRY

IN A week when rising crypto values have shuddered to a halt, Ethereum token Alchemy Pay (ACH) has caught the eye of analysts as it furiously swims against the tide.

The $212m market cap altcoin posted a 24hour rise of 12 per cent last night, adding to an astonishing weekly and monthly uplift of 145 per cent and 280 per cent respectively.

FOR ALL THE LATEST NEWS, VIEWS AND ANALYSIS HEAD OVER

HEAD SPACE

In the 1950s, Dr. Curt Richter, a pioneering psychobiologist and professor at Johns Hopkins University, placed rats into buckets of water and timed their ability to swim. It was an interesting, if brutal, experiment. On average, the rats would give up and drown after about 15 minutes. Dr. Richter then modified the experiment: just before the 15-minute mark, when the rats were expected to give up due to exhaustion, they were plucked from the water, dried off and allowed to rest for a few minutes. They were then placed back in the water. This time, the rats did not drown within the same timeframe. Nor were they so tired from treading water earlier that they drowned in less time. The rats, in fact, swam for 60 hours. 60 hours!

This experiment demonstrated the power of hope. When the rats believed that they would be rescued, they kept going and going and going. In other words, the absence of hopelessness gives strength. Hope empowers us to reach so much further than we thought possible.

Some days hanging onto hope is all that we have. On those dark days, hold on tightly. Hope is an antidote to anxiety, a plan of

action, a survival skill that enables us to cope in the face of adversity. It is plausible possibility in the face of frightening probability. It is what allows us to rise above the awareness of pain and disappointment. Hope is finding meaning and connection to others. It is the belief that we are relevant, that who we are and what we do matters. We must not, however, confuse hope with wanting or wishing. To want or to wish for something or someone sits right on the edge of fear, possibly even despair. What if I don’t get that contract? What if my proposal is turned down? What if the news from the doctor is terrible? Fear is paralysing. It pushes us into a freeze response that keeps us stuck, turning stability into stagnation. Perhaps it is more helpful to think of hope in terms of trust and faith. Sometimes we need to take a leap of faith. We need to take that first step and trust that we have prepared enough, that we have the support and inner resources available to achieve whatever it is that we dream of. Hope is trusting that we deserve to live a meaningful life that is true to our values, our sense of self and, although imperfect, a life that we are proud of.

CITY DASHBOARD

YOUR ONE-STOP SHOP FOR BROKER VIEWS

LONDON REPORT BEST OF THE BROKERS

Wall Street sell-offs sets London’s FTSE 100 adrift from top value

LONDON’s FTSE 100 was drawn into a sell-off on Wall Street last night, pushing it further below the 8,000 point threshold yesterday.

The capital’s premier index fell 0.59 to 7,930.64 points, while the domestically-focused mid-cap FTSE 250 index, which is more aligned with the health of the UK economy, slid 0.82 per cent to 19,688.98 points.

Investors across the pond ditched US stocks on Tuesday after a string of hotter than expected inflation and spending data firmed expectations of the Federal Reserve having to keep interest rates higher for longer to tame price pressures.

Wall Street’s top indexes, the techheavy Nasdaq, S&P 500 and Dow Jones, all notched their worst trading days of 2023 so far.

Downbeat sentiment spread to Lon-

don, weighing on FTSE 100 shares. Just five companies on the premier index registered gains in early trading before picking up in the afternoon.

Victoria Scholar, head of investment at Interactive Investor, said: “After the FTSE 100 closed Tuesday’s session in the red, European markets have opened lower with the UK index languishing back below the key 8,000 mark.”

Minutes from the latest Fed meeting were published last night, possibly amplifying yesterday’s selloff if they signal chair Jerome Powell and other rate setters’ concerns about inflation sticking around.

Britain’s largest mortgage lender Lloyds Bank anchored the FTSE 100 during early exchanges after it posted results yesterday that revealed it set aside more than £1bn to deal with an expected jump in loan defaults.

Analysts at Peel Hunt have said they see strong future growth for homeware retailer Dunelm despite reporting a 17 per cent drop in interim profit. Peel Hunt praised its “product mastery”, which has boosted its market share to 10.8 per cent, and said its strong customer engagement and digital initiatives will “power Dunelm’s growth ambitions”. It advised to buy the stock and set a target price of 1,375p.

The absence of any news about who will next lead media company Future, which owns Marie Claire, has weighed on the firm’s share price. But confirmation that Jon Steinberg will take the helm in April “should be a positive catalyst for the shares,” Peel Hunt said. It recommended buying the stock and set a target price of 2,300p.

AND MARKET REPORTS

MARKET WEAKNESS “It’s been another weak session for markets in Europe despite a softening in yields with the FTSE 100 slipping to a one-week low, weighed down by weakness in basic resources and financials.”

MICHAEL HEWSON, CMC MARKETS

Our mental health columnist Alejandra Sarmiento writes for us monthly on the stresses of Square Mile life

Hope is a funny thing, but it’s vital to allow us to face the future in difficult times

OPINION

EDITED BY SASCHA O’SULLIVAN

The Conservative morality of Kate Forbes will never lead Sturgeon’s party

THE PAST few days have seen the Scottish National Party convulsed by the backlash to the socially conservative views of Finance Minister and leadership candidate Kate Forbes.

A member of the evangelical Free Church of Scotland, Forbes has been blunt about her beliefs on abortion, homosexuality, and sex outside of marriage. Most strikingly, she admitted that had she been in Holyrood at the time, she would have voted against the legalisation of same-sex marriage.

For this she has been extensively criticised, with some of her early backers withdrawing their support. This has led some, including Forbes herself, to suggest that such criticism shows an intolerance towards religious minorities. This ignores the many religious politicians, including fellow Free Church member and the SNP’s former Westminster leader Ian Blackford, who have criticised Forbes.

What complicates this issue is the widespread belief that social issues should be matters of conscience where individual MPs are given the freedom to vote in line with their personal beliefs. This, however, misunderstands the history. Such free votes were first offered as a mutual disarmament pact

Let’s be

THE UNITED States and the EU are teetering on the edge of a major trade dispute as a result of Joe Biden’s landmark economic legislation, the Inflation Reduction Act.

Don’t be fooled by the name, far from tackling inflation, the legislation enacts a cornucopia of Democratic Party economic priorities, including subsidies for low and zero-carbon technologies.

The EU has taken particular umbrage with rules on electric car subsidies. They fear it will drive green business away from Europe. They also argue the law unfairly discriminates against European companies, because subsidies are contingent on production being US-based. This piece of legislation, one could argue, is little more than “America First” with a green tinge.

In response, the EU is considering relaxing its state aid subsidy-control rules to allow member countries to compete. Not to be left out, UK manufacturers and politicians have also raised alarm bells.

between the major parties in order to pass liberalising legislation. Placing these issues “above party politics” reassured social moderates that such measures couldn’t be demonised by their political opponents and provided social conservatives with the freedom to vote as they desired. Crucially, as Labour became more unapologetically socially liberal it broke with this practice, frequently not just including liberalising measures within its manifestos, but whipping its MPs to vote in line with what the leadership saw as key principles of the party.

A big reason for this change is that public opinion has changed, with

views such as those held by Kate Forbes becoming increasingly held by a very small minority of Britons. That is doubly true for the SNP whose membership has become more left-wing as it successfully defined the wider nationalist project against English Toryism. It must be slightly disorientating for someone like Forbes to realise what were once commonplace positions have become politically toxic. But this happens all the time in politics. It just feels more fraught because it touches upon religion, and the changes in attitudes have been so rapid. Take instead the question of proEuropeanism. Like social issues this

used to be an issue that cut against party lines with both Labour and the Tories having a significant Eurosceptic minority. Gradually the two parties polarised on the issue, as Labour became more pro-European and the Tories more Eurosceptic. But in a cruel quirk, perhaps Britain’s most outspoken Europhile was left marooned in the wrong party.

Just like how Kate Forbes passionately believes in Scottish independence, Ken Clarke really is very Conservative. In his prime he was a Thatcherite bruiser who provoked a bitter strike with nurses as Health Secretary and significantly cut public spending as Chancel-

lor. But he hid that steel beneath an easy-going veneer that meant even committed anti-Tories found him difficult to dislike. He would’ve been perfect to rebuild the party after either of their landslide defeats, especially when the alternatives were a callow William Hague or Iain Duncan Smith. But he could never find a way to overcome the fact that he and his party bitterly disagreed on the issue of Europe. Clarke would come out with all sorts of gimmicks and fudges to bridge the gap, but there simply wasn’t a way to make it safe or coherent for him to lead their party.

The same is true of Kate Forbes today. Kate Forbes can say that she recognises that issues such as same-sex marriage and abortion have been settled by past legislation, but other social issues will arise, and her political belief that it’s the role of government to impose conservative morality on all its citizens would shape her administration’s decisions. Indeed, she has already said that she would abandon Nicola Sturgelon’s plans to challenge the British Government veto of Scotland’s reforms to the Gender Recognition Act. People who oppose Forbes’ leadership are not being intolerant, just realistic. A social conservative cannot lead a socially liberal party, any more than a Pro-European can lead a Eurosceptic one. Whereas outliers can be tolerated elsewhere on the frontbench, agreeing with your party on key issues is a genuine occupational requirement of leadership.

£ Will Cooling writes about politics and pop culture at the It Could be Said substack

BLAIR BACK IN THE LIMELIGHT

Harrison Griffiths

For the UK to join in would be a huge mistake. Attempting to reshore industry to the UK would be naïve and economically illiterate. Naïve because the UK could never hope to match US subsidies: its population is one fifth of the population of the States, and its economy is one sixth the size of America’s. Even Labour’s relatively ambitious “UK Green New Deal” investment pledge of £28bn before 2030 is a drop in the ocean compared to America’s almost £310bn splurge. We have known since the days of classical economists like Adam Smith and David Ricardo that countries have comparative advantages. What this means is production is more efficient

when we use the wealth created in the UK to purchase products made better elsewhere, rather than pursuing self-sufficiency.

According to Smith, “consumption is the sole end and purpose of all production”. He believed “the interest of the producer ought to be attended to only so far as it may be necessary for promoting that of the consumer”.

UK politicians would do well to pay more attention to Smith than electric car manufacturers begging for special favours and subsidies. Consumers, not producers, should be the priority when formulating economic policy – it should be they who pick winners and losers in the market.

Consumers’ interests would be served by making it as simple as possible to import US taxpayer-subsidised green technology, rather than embarking on another industrial strategy boondoggle.

Greater subsidies could also end up harming the fight against climate change. Current electric vehicle technology may present a great opportu-

nity to reduce carbon emissions, but we cannot know what better innovations may arise in future. After all, the ‘dash for diesel” - the policy of subsidising diesel cars - ended up clogging the lungs of Londoners.

If the government wants to decarbonise, it should instead impose a carbon tax. Setting a constant price on each unit of carbon would reduce emissions and allow the market to determine the most efficient ways to decarbonise. Adopting this approach would control carbon externalities without the state embarking on new forms of protectionism.

The US government’s decision to subsidise its way to net zero is unfortunate for their economy and taxpayers, but this is out of our control. The government should take the win and allow cheap American green technology to pour into our market. American taxpayers are doing us a huge favour; we would be foolish to pass it up.

£ Harrison Griffiths is a communications officer at the Institute of Economic Affairs

Tony Blair felt left out yesterday, all this squawking from former prime ministers and not a peep out of him! So the former Labour leader and his Institute of Minions (some of whom write for us) spent the morning amping up his campaign for digital IDs

honest, American taxpayers are doing us a huge favour with green subsidies

Kate Forbes is running to be leader of the SNP and First Minister of Scotland

WE WANT TO

LETTERS TO THE EDITOR

Our buildings need to go green

[Re: Bill Gates says Britain has ‘all the ingredients’ to be a net-zero leader, Feb 15]

Global tech billionaire Bill Gates recently commented that the UK “has all the ingredients” to lead a net-zero world, citing cleantech businesses, innovators, and policy makers coming forth to make this nation a “climate leader.”

Yet if we plan to get there, we need to look at all areas of eco-friendliness to change.

The UK’s built environment is responsible for 25 per cent of the total carbon footprint and offices are often an overlooked contributor. In fact, 80 per cent of London’s offices need upgrading to meet energy efficiency regulations by 2030, with Minimum

Energy Efficiency Standards set to tighten even further.

Office buildings will have to decarbonise, if they want to stay fit for purpose.

Efforts must go beyond the basics of recycling and reducing waste. Introducing green spaces as part of office complexes can help offset emissions.

Eliminating full-time heating and lighting, especially during off-peak hours, reduces costs and eliminates excess power being used. Occupancy must also be considered, with fuller, multi-tenant buildings often more sustainable than a single occupier building.

We need sustainability at the heart of the built environment strategy, if we want to look forward to the green Britain that Gates speaks so highly about.

Simon Eastlake Office Space in Town (OSiT)

We didn’t know it, but it was 2015 not 2008 that changed the housing market forever

Giles Mackay

FOR the housing market, 2015 was probably the most important year in over a hundred years. It was the year the longheld argument of “demand and supply” was won and lost. Supply, which lost the argument, is the governmental model according to which the more homes you build the lower the prices. The demand side is driven by the amount of people who can afford to buy.

Housebuilders like banks had been hit hard during the financial crisis of 2008. A significant majority had required support or gone bust. By 2015 the banks had largely divested themselves of the housebuilders, which were now back in private hands. They learned their lessons - don’t build too much and take on too much debt, and make sure there is an identifiable market for your product.

Aldi has joined the ranks of Asda and Morrisons in limiting the sales of certain fruit and veg such as peppers and tomatoes. There have been shortages as a result of extreme weather in Spain. Waitrose, Tesco and Lidl are yet to follow.

EXPLAINER-IN-BRIEF: MAKING DIGITAL IDENTIFICATION HAPPEN

Yesterday Tony Blair and William Hague urged the government to introduce digital ID cards. It would mean your driving licence, educational qualifications and the right to work, are all in one place - your smartphone. With time, they say, it could make it a lot easier to access benefits and ultimately, all public services. Blair tried to introduce digital ID during his time, but was blocked by the coalition government. It is still controversial today. Its critics are concerned that it would

represent a breach of civil liberties. Others point to the appalling record that British governments have on largescale IT projects and database creation.

But according to analysis by McKinsey, countries could “unlock economic value equivalent to between 3 and 13 percent of GDP in 2030 from the implementation of digital ID programs” - so the economic benefits could be substantial.

ELENA SINISCALCO

So why was 2015 a big deal? Looking back to the start of the millennium, when average house prices were £93,000 and average incomes were at £22,000, far more people than today would easily qualify for a mortgage. However, by the time we reached 2015 prices had recovered enough to get back to pre-2008 levels. New mortgage regulations meant stress testsapplied to a mortgage borrower's application to check the borrower's ability to repay their mortgage at a given interest rate - and tighter lending criteria led to disappointment for many would-be buyers. The rest is history. Between 2000 and 2021 house prices rose by 186 per cent but incomes only rose by 76 per cent. 2022 made matters even worse, with inflation and a costof-living crisis only further denting people’s income.

That meant it became effectively im-

possible for the “affordability” question to be addressed by building more homes. Why? Because homes would have to have fallen by 20 per cent to be affordable and remain at that affordability level. In 2022 this number would be closer to 30 per cent. Owners would be in negative equity or have significant elements of their net worth wiped out and housebuilders would just not build in any case.

Help to Buy was introduced in 2013. Through the policy, buyers don’t have to pay interest on the top 20 per cent of the cost of the house for up to 5 years. This pushes the cost down below the level at which lenders feel comfortable and thus can lend. By 2015, first time buyers were catching on and by 2022 310,000 transactions had been completed to give families a chance to get onto the housing ladder.

Shared ownership similarly gives affordability because the shared owner only pays 2.75 per cent on the part of

the house they do not own. Help to Buy has been phased out now but evidence shows that shared ownership units are being sold at 3 to 4 times the rate that full ownership units are, in the current difficult market conditions.

Builders, including Barratt and Persimmon, have all reported they have cut back on their build programs. They are not going to build if they cannot sell and will not make the same mistake as they did in 2008 when they got left with a lot of inventory.

Demand has won the argument and the only way to increase building rates is to drive more affordability by bringing forward models like shared ownership or policies pushing costs down. Otherwise, those families who can’t afford to buy will be forced to continue to rent.

£ Giles Mackay is a property expert and founder of Outra

By the time we reached 2015, house prices were back to pre-2008 levels

House prices in London rose by 2.1 per cent last month

EAT YOUR GREENS ... but not too many of them as Aldi rations their vegetables

HOTPROPERTY

KILL YOUR COMMUTE: THE RISE OF CITY LIVING

To the uninitiated the City of London is unfairly thought of as an endless stream of glassfronted office blocks from which chaotic workers stream, headlessly going between meetings, their only reward being the Tube journey home. But anyone who’s lived and worked in the City knows it’s a brilliantly concentrated opportunity for culture and hedonism.

Before the world shut down in 2020 there were strict rules not to build residential buildings in the Square Mile –the only exception in the last decade was the Heron Tower, completed in 2013. But the exodus of workers in the City has led to offices being a third less busy than before You Know What, forcing a rethink.

Now 1,500 homes have been commissioned to be built before 2030 and one of those is The Haydon, a short walk from members’ club The Ned, the Bank of England and The Royal Exchange. It will have 87 luxury apartments, a pool and dedicated fitness and lifestyle areas, with price from just £625,000.

“Moving on from being ‘just’ a financial hub, its impressive lifestyle offering, foodie scene, vibrant nightlife and rich history and culture has changed perceptions of this location,” says Jacob Sullivan, sales and marketing director

at Regal London who are building the development. It will join the likes of One Bishopsgate Plaza, Barts Square and the Lincoln Square developments as the creme de la creme of City living.

It’s too early to tell whether this bout of development will be the start of a new residential boom for the Square Mile. The statistics paint a mixed picture: one JL study found that sales of new and resale properties was slower in the Square Mile than the rest of central London since 2010. But eXp UK research shows house prices here increased an average of 4.4 per cent over the last three months, compared to a 1.6 per cent drop in Westminster and a 2.7 per cent drop in Hammersmith & Fulham.

The CBRE’s Borough by Borough report for 2022 forecasts house prices in the Square Mile will rise 22 per cent over the next five years, which is higher than the London average of 19 per cent.

Once you’re settled, there’s a surprisingly village-like feel to The City of London, with its gorgeous old churches serving bacon buns to eat on pews, the most labyrinthine pubs in the capital and the idiosyncratic architecture. There are also enough dining options to keep you well fed for some time without making too many repeat visits. We’re fully behind the City’s new push for housing –after all, it’s our home.

Bitcoin buyers:

How crypto could transform the property market

the technology could be applied to property purchases. We asked one expert how he sees the future of property sales and how the blockchain could be at its heart.

DOES CRYPTO HAVE A PLACE IN THE FUTURE OF PROPERTY TRANSACTIONS?

While crypto currency is too volatile an asset to be useful for completing property transactions, there are myriad ways

Yes, blockchain technology will substantially impact the property market, enabled by blockchain technology, smart contracts and web3 applications. Of course the cryptocurrencies or tokens underlaying such ecosystems will play a pivotal role in the UK property market, as they already do in many markets worldwide.

IS THERE DEMAND FROM BUYERS?

The space is still in its infancy stage and, due to the lack of regulation,

does not lend itself to transacting for anyone outside the space. There are virtually no examples of onchain property transactions at this stage outside of the metaverse. Bitcoin is (and certainly will be when fully mined) a storage of value – like digital gold –similar to actual gold nowadays. An on-chain property transaction would be like exchanging for another value like company shares or

an artwork. These cases exist but are blips and don't provide a basis for the future vision of on-chain property transactions.

WHAT ARE THE POTENTIAL BENEFITS?

In the past five years I have seen compelling cases for deeds moving onto the blockchain via a sort of NFT protocol. A regulated crypto space could bring about added security and transparency as well as many efficiencies and cost reductions for the transaction process. The tokenization of assets brings benefits of co and micro-ownership

and facilitates access to the property ladder for younger generations. Joint ownership (shared freehold or leasehold) structures could be managed via existing smart contract protocols and web3 ecosystems. This list of possible use cases down the line could be ‘infinitely’ extended..

WHAT ARE THE DRAWBACKS?

The current major drawback is the infancy of space, the lack of transparency; volatility and regulation are one element but the complexity of the technology and difficulty to assess merit from fraudulent projects, adds to the current near irrelevance for property transactions in the real world. Blockchain technology can be compared to the internet revolution, the question is, are we in 1990 or 2000?

CGI images of The Haydon, a short walk from members’ club The Ned, the Bank of England and The Royal Exchange

There’s no need to take the Tube home - a bout of new properties are opening in the City, writes Adam Bloodworth

From increased efficiency to more transparency –Maximilian Stamm, MD at Engel & Völkers London, lays out the case for Bitcoin

A newly completed collection of 39 one, two and three bedroom apartments in the heart of London’s cultural and intellectual capital. With facilities to rival the world’s best hotels it’s your time to embrace life within one of the London’s most iconic neighbourhoods.

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GOING OUT

EDITED BY STEVE DINNEEN @steve_dinneen

A THRILLING TOUR OF THE APOCALYPSE

ART

UNMISSABLE

MIKE NELSON: EXTINCTION BECKONS

HAYWARD GALLERY

BY STEVE DINNEEN

The Hayward Gallery has emerged as London’s foremost destination for largescale installation art since it reopened in 2018, from the bio-technological horror of Lee Bul’s pink tentacles to the jaw-dropping scale of a Finnish spruce in Among the Trees.

But even against this backdrop, Mike Nelson’s Extinction Beckons sets a mind-boggling new standard for transforming a space, converting both floors into a sprawling, interconnected installation that imagines and examines possible futures for mankind.

It begins in the dark. You enter through a red-lit warehouse stacked high with wooden planks and wrought iron doors and all manner of nicknacks, a scene-setter for what’s to come. Next you’re met by a vast wooden structure made up of a warren of corridors and strange little

rooms. There’s a speakeasy bar, a gambling den, a low-rent travel agent, all deserted. There are stories to be unravelled here: a hastily-extinguished cigarette suggests someone left in a hurry; an upturned chair in the makeshift casino hints at recent violence.

The main exhibition space is filled with grids of concrete rebar interspersed with rubber castings of faces, some stretched grotesquely between the geometry of the metal. Nearby there’s the abandoned (again) hideout of a fictional biker gang, strewn with cigarette lighters and, for some reason, razor clam shells. In each of these possible futures it’s up to the viewer to finish the puzzle, to bring their own fragments of narrative.

It’s a career survey of sorts, or at least as close as you can get to one given the ephemeral nature of Nelson’s work (only one of his pieces is in a collection and most of his work is dismantled after being displayed). A partially buried desert shack surrounded by shredded tires and old oil drums houses a dark room filled with photographs of the same installation being constructed 20 years prior, toying with the concept of permanence.

It’s a fascinating, absorbing exhibition, at once joyous and melancholy, and utterly unlike anything else.

SPARKLE AND SPECTACLE IN THIS SOLID HIT

OPERA

RECOMMENDED

THE RHINEGOLD

THE ENGLISH NATIONAL OPERA BY TACITA QUINN

Richard Jones’s tacky and triumphant Rhinegold is the most recent addition to the English National Opera’s Ring Cycle.

After a mixed and shadowy Valkyrie, Jones has reembraced his familiar droll kitschiness with a glorious slice of dramatic and comedic gold, complete with delicious Wagnerian weirdness.

Wagner’s opera follows the story of the Nibelung Alberich, who forges the ultimate ring of power from the Rhinegold he nicked from the beautiful Rhinemaidens. Alberich (Leigh Melrose) hits us with a snarly baritone, and along with his general unkemptness he strikes a creepy character, just the type to enact petty revenge after being caught perving.

In the godly realm, Wotan (John Relyea) employed the giants Fasolt (Simon Bailey) and Fafner (James Creswell) to build the gods a fortress, but they demand the payment promised to them: the goddess of love, Freia (Katie Lowe). The mischievous and clever Loge (Frederick Ballentine) ar-

rives and helps Wotan barter with the giants, who agree to forfeit Freia in exchange for the Rhinemaidens treasure. The entire production whizzes past, despite the lack of interval. Jones has cleverly struck a balance between red hot drama and moments of charming amusement.

Balletine’s Loge is particularly responsible for the latter, hot-footing around the stage, his physicality is as enjoyable as his smooth tenor voice. He is well matched by Relyea’s stormy Wotan whose bass-baritone growled with authority, only humbled by a colossal, earth-shattering slap from the goddess Erda (Christine Rice).

The staging goes from strength to strength. Although the costumes are slightly underwhelming, Stewart Laing’s set design is playful glittery and gaudy. The shimmering rainbow that transports the gods to Valhalla is created through a waterfall of coloured confetti, showering the deities in heavenly light even as Loge warns of their impending doom. Visually, this Rhinegold is a complete thrill.

Conductor Martyn Brabbins starts unobtrusively but eventually finds his sparkle. As Jones’s production reaches its fever-pitch, Brabbins keeps the production marching.

Given the ENO’s recent battle for funding, their first new production of 2023 had to be a hit. Thankfully, Jones, along with his army of Nibelungs, has pulled it out of the bag.

SQUARE MILE TO BE NEW HOME OF THE MIGRATION MUSEUM

A multi-million pound development in the Square Mile will give a new home to the Migration Museum.

The space at 65 Crutched Friars near Tower Hill will be transformed into a 21-storey stateof-the-art site and has been granted 60-years rent-free space by the developer.

Dubbed “Britain’s gateway to the world for thousands of years” by the museum’s chief executive, the Square Mile was seen as the perfect place for the cultural institution, which tells the story of the movement of people to and from the UK.

Moving from Lewisham, the new museum will be based across three floors of the site and include an event space, cafe and shop.

The Migration Museum educates about how migration has shaped the country and capital right until today, with educational exhibitions and activities about modern British life.

The developer, a firm owned by Sukhpal Singh Ahluwalia who fled Idi Amin’s Uganda as a refugee, will also cover the museum’s operating costs and donate half-a-million pounds to support fundraising efforts.

The new site is estimated to cost £15m according to one of its trustees. It intends to remain in Lewisham until at least 2025/26, and the new site is slated to be ready from 2027.

RECOMMENDED

ROMEO AND JULIE

NATIONAL THEATRE (DORFMAN)

BY STEVE DINNEEN

Romeo and Julie is the tale of two star crossed lovers from Splott, Cardiff, whose forbidden love threatens to tear apart two houses not particularly alike in dignity.

We first meet the tragic hero elbowdeep in a soiled nappy. This Romeo is a working class, 18-year-old single dad struggling to raise the baby he couldn’t bear to put up for adoption, despite its mother wanting nothing to do with them, and his own mother being a chaotic alcoholic.

His life is transformed when he meets the precocious Julie, an aspirational working class lass from the other side of the tracks, who’s set on studying physics at Cambridge.

Clearly his intellectual superior, she nevertheless falls for the doting young

A-LISTER BRINGS GRIT TO GREEK TRAGEDY THEATRE

RECOMMENDED

MEDEA

SOHO PLACE

BY ADAM BLOODWORTH

Soho Place, the first new West End theatre to open in 50 years, has sped to relevance. The £300m project opened with a piece of new writing with no famous actors in it, a bold move that was well received. But the third show, Medea, is a more obvious choice.

Most importantly, it has real star power. Sophie Okonedo is ravishing as the titular lead Medea, from the Greek myth of Medea and Jason. She gives a rich portrait of female trauma that has a dark relevance. It’s pacy, too: there’s not a moment to lose interest in this one-hour-30-mins one act thriller, its witty script taken from a 1949 translation of the Greek text.

Medea has spent her life pandering to Jason but one day the enchantress, who can perform spells on people, is banished from Athens despite her lifetime of goodwill. Her partner, a gaslighting Jason, brought to the modern day with jeans on, could be a coercive controller in any of our lives.

It’s a complicated role but Okonedo’s Medea is compulsive. With both anger and whimsy, she builds an astonishing

picture of delusion at the hands of her oppressor. With every new piece of bad news, Okonedo peers listlessly into the middle distance, her impressive animalistic movements denoting fear, but also a desire to do harm.

There’s a lightness too, mostly through the miraculously good Ben Daniels, who plays four male characters like that’s an ordinary thing for an actor to do; he barely leaves the stage throughout. He brings an effeteness as Aegeus but also nails the formidable Jason, who hangs over Okonedo like a bird of prey. Daniels resembles Daniel Craig in looks and sartorially, but with something like Sean Connery’s attitude to equality.

There’s a straightforwardly effective set designed by Vicki Mortimer that, inthe-round, projects how everything feels as if it is closing in on Medea.

The inevitable scene of violence –fans of Greek mythology will know what I mean – had me shifting in my seat and biting my nails. Marion Bailey, who played the Queen Mother in The Crown, is also gripping, embodying the worry and dread of a thousand Grecian women as Medea’s supportive nurse.

There’s a whimsical air, a general lightness that mostly works, but may put off purists. Once or twice, Medea could have been left to linger on a particular feeling a little longer. But mostly Okonedo proves she’s one of Britain’s best, laying down a masterful performance to be devoured.

Q&A: THE LOWDOWN

Martin ‘Zippo’ Burton from Cirque Berserk on making a scene and the future of circus

HOW DOES IT FEEL TO CELEBRATE 10 YEARS OF CIRQUE BERSERK?

father, whose unlikely parenting skills and awkward charm is enough to distract her from her physics textbook.

Gary Owen and Rachel O’Riordan’s play is a riff on Shakespeare rather than a modern take on it, using the recognisable structure to examine class, austerity and the good people who fall through the cracks in places like Splott.

While the script is brimming with cliches –Julie is the first in her family to attend university; her father is a steel worker with a pair of busted lungs –the writing is so sincere and the comedy so well judged that a reliance on archetypes is easily forgiven.

And it’s anchored by genuinely wonderful performances, especially Callum Scott Howells and Rosie Sheehy in the leads. Their quick-fire dialogue is laugh-out-loud funny and they share a steamy sexual chemistry.

Both heartwarmingly nice and tearjerkingly sad, this is the perfect romcom for the National Theatre crowd.

10 years, five West End runs, two record breaking Edinburgh Festival seasons. The show has grown and changed a lot and never gotten stale. Getting naked flames and real motorbike stunts approved by Westminster Health and Safety was our greatest achievement.

WHAT’S THE DNA OF A REALLY GOOD CIRCUS ACT?

In terms of Cirque Berserk a great circus act should involve real jeopardy, and the audience needs to know that. I always like to see audience members with their hands over their eyes, watching the show between their fingers. The louder the audience screams, the faster the motorbikes in the Globe of Death go. This year for the Riverside Studios we have increased the top speed from 60mph to 80mph! Only Cirque Berserk can do this safely.

ARE THERE TOO MANY 'MAINSTREAM'

CIRCUS SHOWS IN LONDON?

I don’t think there is any real circus in the West End, unless its Cirque Berserk.

Cabaret has always been sexualised, which is why my parents wouldn’t let me watch cabaret. Let’s face it, who doesn’t want to go to the KitKat Club?

WHICH ACT ARE YOU MOST CHUFFED TO HAVE LANDED?

Paulo dos Santos flies through the air and leaps across the stage doing 10 handsprings in a row. Santos is a little person and in his 20s became intrigued with the Brazilian martial art form Capoeira. But no one would teach him.

“They thought I wouldn’t be good because I’m small,” dos Santos said once, “Finally, I found a teacher and studied with him for a year and then won a big competition in

Brazil. That proved to everyone that I could do it.” So landing him was a big coup.

WHAT’S THE FUTURE FOR CIRCUS?

I have been producing and appearing in Circus shows for 49 years. People often ask me if the circus will survive. Of course it will, the one tradition in circuses is the ability to adapt to changing times. Cirque Berserk is a long way away from my first circus 49 years ago, but it is a circus looking towards the future. If you haven’t been to a circus since childhood, then it’s time to come to Cirque Berserk, a lot has changed.

£ Cirque Berserk runs until 11 March 2023 at the Riverside Studios in Hammersmith

A LEAGUE OF ITS OWN

City A.M. in March last year.

“We’re having invitationals and then we see that evolving into a proper league where you will have players on teams that will participate in every event across

that is going to evolve out of this, the fans are going to go ‘oh yeah’,” LIV Golf commissioner and CEO Greg Norman told City A.M. in May. “The notion of taking virgin space in golf and delivering a mechanism

Johnson’s 4Aces to take on Smith’s Ripper GC and Mickelson’s HyFlyers

Dustin Johnson was the undisputed winner in LIV Golf’s debut season, finishing top of the individual standings and leading his 4Aces GC to victory in the team competition.

Johnson is back for 2023, flanked once again by Patrick Reed, Peter Uihlein and Pat Perez, as the former world No1 looks to defend his crowns. Settled line-ups mean the team aspect should take on greater

significance in LIV Golf’s first year as a fully fledged league, and 4Aces face competition from, among others, Cameron Smith’s Ripper GC, Phil Mickelson’s HyFlyers GC and Henrik Stenson’s Majesticks GC. Among the newcomers to LIV Golf this year are Belgian Thomas Pieters, who is one Bubba Watson’s RangeGoats, and Mito Pereira, who is on Joaquin Niemann’s Hispanic flavoured Torque GC.

In that sense 2023 is year zero for LIV Golf. Its first season as a full-fledged league containing 12 franchises with fixed line-ups playing a circuit that has almost doubled in size –from eight tournaments to 14, beginning on Friday with LIV Golf Mayakoba in Mexico –offers the first true iteration of what Saudi Arabia has backed to the tune of $2bn (£1.7bn).

clutch of top-20 players that Norman had spoken of targeting. World No35 Thomas Pieters is the most significant new signing for 2023, the Belgian joining a pool that features 13 men boasting 24 major titles between them and four former world No1s.

What LIV Golf has in its favour is the guarantee that its big names will go up against each other for the duration of

4ACES GC

Dustin Johnson

Patrick Reed

Peter Uihlein

Pat Perez

CLEEKS GC

Martin Kaymer

Bernd Wiesberger

Graeme McDowell

Richard Bland

HYFLYERS GC

Phil Mickelson

Cameron Tringale

James Piot

Brendan Steele

MAJESTICKS GC

Henrik Stenson

Ian Poulter

Lee Westwood

Sam Horsfield

containing 12 franchises with fixed line-ups playing a circuit that has almost doubled in size

Frank Dalleres

“elevated” events designed to achieve just that.

Some golf fans have taken to LIV. Others haven’t. But like cricket’s the Hundred, existing golf fans weren’t the target. “I want to get down to these 15year-olds, 12-year-olds, bring them in through our production and get them going ‘Daddy, Mummy I want to go to this’,” Norman said last year. Has it reached new audiences? Probably, but it is hard to be sure.

It has not been helped by turbulence off the course. Bratches has since departed, while legal rows rumble on over whether LIV players can also compete on PGA Tour and its European counterpart, the DP World Tour. That

14 EVENTS, FIVE CONTINENTS: 2023 CALENDAR

IRON HEADS GC

Kevin Na

Scott Vincent

Sihwan Kim

Danny Lee

SMASH GC

Brooks Koepka

Matthew Wolff

Jason Kokrak

Chase Koepka

banking more than $35m (£29m) in prize money from playing seven LIV Golf events, most of which came from his individual success. If the team and league element of the circuit is to take prominence then, in time, it may be that organisers will have to reflect that in the way prize money is allocated. Money and squabbling over players’ eligibility for other tours or ranking points at times drowned out discussion of the sport last year – to some degree understandable, given that its debut season was a “beta test”, not the finished article. Those distractions aren’t about to disappear, but this is the time for LIV Golf’s league format to take centre stage and show what it can do.

MAYAKOBA

24-26 February: El Camaleon Golf Course, Mayakoba, Mexico

TUCSON

17-19 March: Gallery Golf Club, Tucson, United States

ORLANDO

31 March-2 April: Orange County National, Orlando, United States

ADELAIDE

21-23 April Grange Golf Club, Adelaide, Australia

SINGAPORE

28-30 April: Sentosa Golf Club, Singapore

TULSA

12-14 May: Cedar Ridge Country Club, Tulsa, United States

DC

26-28 May: Trump National Golf Club, Washington DC, United States

VALDERRAMA

30 June-2 July Real Club

Valderrama, Sotogrande, Andalucia, Spain

LONDON

7-9 July: Centurion Club, St Albans, United Kingdom

GREENBRIER

4-6 August: Old White Golf Course, Greenbrier, United States

BEDMINSTER

11-13 August: Trump National Bedminster, United States

CHICAGO

22-24 September: Rich Harvest Farms, Chicago, United States

MIAMI

20-22 October: Trump National Doral Miami, United States

JEDDAH -

TEAM FINALE

3-5 November: Royal Greens Golf Course, Jeddah, Saudi Arabia

FIREBALLS GC

Sergio Garcia

Abraham Ancer

Carlos Ortiz

Eugenio Chacarra

RANGEGOATS GC

Bubba Watson

Talor Gooch

Harold Varner III

Thomas Pieters

TORQUE GC

Joaquin Niemann

Sebastian Munoz

Mito Pereira

David Puig

RIPPER GC

Cameron Smith

Marc Leishman

Matt Jones

Jed Morgan

STINGER GC

Louis Oosthuizen

Charl Schwartzel

Branden Grace

Dean Burmester

CRUSHERS GC

Bryson DeChambeau

Paul Casey

Charles Howell III

Anirban Lahiri

Clockwise from main: Mayakoba, Royal Greens in Saudi Arabia, and Valderrama

Premier League: ‘Regulator can’t damage success of competition’

MATT HARDY

PREMIER League chiefs have warned that the proposed independent regulator for English football must not damage its success.

The UK government will today publish its white paper on plans to install a regulator to ensure clubs are financially sound and implement more stringent owners’ and directors’ tests to deter what the government describe as “unscrupulous” bosses.

“The publication of this White Paper is a significant moment for English football. The Premier League and its clubs will now carefully consider the Government’s plan for England to become the first major nation to make football a government-regulated industry,” a Premier League statement said.

“We appreciate the Government’s commitment to protect the Premier League’s continued success. It is vital that regulation does not damage the game fans love to watch in the deepest professional pyramid in the world, or its ability to attract investment and grow interest in our game.

“We will now work constructively with stakeholders to ensure that the proposed Government regulator does not lead to any unintended consequences that could affect the Premier

OPINION

GAME ON Wales’ match against England to go ahead after talks

League’s position as the most-watched football league in the world, reduce its competitiveness or put the unrivalled levels of funding we provide at risk.”

Any changes to the owners’ and directors’ test could affect suitors for Manchester United, who include the former Emir of Qatar’s son and British billionaire Sir Jim Ratcliffe.

The combined net debt of clubs in the top two tiers of English football reached nearly £6bn in the 2020-21 season, the government said, and the regulator will focus on greater transparency and financial stability.

Niall Couper, chief of Fair Game, a group of clubs looking for better

governance in football, said: “This is a historic moment. At last we have a roadmap to a brighter future.

“Football is broken – the European Super League, reckless overspending, fans being ignored, and a financial flow that is flawed. We need culture change. But we’re deep in time added on for the introduction of the regulator. Every minute that passes clubs move closer to the abyss.

“The question now is to ensure that any new regulator is fit for purpose and has real teeth to make a difference.”

The Six Nations clash between Wales and England will go ahead on Saturday after Welsh players called off threats to strike. The game had been in doubt over issues between players and their clubs –who are in part funded by governing body the Welsh Rugby Union –surrounding pay and future contracts. Crunch talks were held yesterday between the WRU, players and the player board which concluded with the game being confirmed as going ahead. Elsewhere, there will be changes to the cap rule –which previously placed restrictions on who outside of Wales could play for the country –as well as fixed and variable contracts. Wales are without a win in the Six Nations thus far and host England on Saturday.

Local councillors plot to seize Worcester land

MATT HARDY

THE Mayor of Worcester wants the Atlas consortium to be stripped of the Sixways stadium site, plunging the futures of Worcester Warriors and Wasps into fresh uncertainty.

Worcester Warriors are set to return to Sixways next year in a controversial deal with Stourbridge RFC, while the club’s new owners say Wasps have agreed to play Championship rugby at the stadium.

But those plans could be thrown into doubt after Worcester councillors on Tuesday resolved to

write to the neighbouring local authority in which Sixways is located, asking them to consider using compulsory purchase orders to seize the land.

“What I am proposing is that we write to the leader of Wychavon Council and ask that Wychavon Council consider using their CPO [compulsory purchase order] powers to acquire the site so that a fit and proper partner, as defined by the RFU, can continue to be the home of professional rugby,” said Councillor Adrian Gregson, Mayor of Worcester.

“There are still concerns about

the nature of any agreement with Wasps and what that entails.

“There remain concerns about Stourbridge, who are clearly in a predicament themselves.

“And the fundamental issue for the need of a fit and proper owner or partner – which the RFU clearly do not see in Atlas otherwise they would have accepted the proposals.

“With those remaining questions about funders and motives and the details of the Begbies [Traynor, administrator] deal, there is still uncertainty and ambiguity.”

Wychavon Council were approached for comment.

Gap between footie brand behemoths and rest likely to grow

THE bidders for Manchester United are now in a virtual data room, filling their spreadsheets and compiling their questions. The job of the Glazer family’s investment banking advisors, Raine Group, is now to find ways to squeeze every possible dollar out of this football asset. One trick of the bankers’ trade is to identify possible sources of profit that have so far been unidentified or underexploited. In short, to sell the dream.

To that end, a study published last week by CLV Group couldn’t have been more timely. Its third Fan Relationship Index report is based on a survey of football supporters from around the globe and concludes that leading clubs are significantly underpowered when it comes to engaging with remote fans. Streaming services, virtual matchday experiences in the metaverse and digi-

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Ed Warner

tal memberships or fan tokens all have the potential to boost income, and with that profits and club valuations.

CLV claims that United are currently missing out on £87m of annual income from such products, each of which could have particularly strong appeal to overseas fans who may never have the opportunity – or perhaps even the inclination – to set foot inside Old Trafford.

It is fair to assume that the economies of scale are such that, when fully up to speed, these offerings would all gener-

ate high margins – perhaps 50 per cent or more. Stick the resulting profit on a punchy valuation multiple (that’s the job of the dream-selling bankers) and these alone could add $1bn (£829m) or more to the takeover price for the club.

Any analysis based on survey data in any industry needs to be dialled back. It’s one thing to say you’d pay for exclusive access to training ground video clips, it’s another entirely to hand over your credit card details and subscribe. But the basic thrust of CLV’s work is compelling.

As I’ve argued here often, the major US sports franchises are far ahead of football in monetising fandom. Even American owners of Premier League clubs – including

the Glazers – have been shy in going all in with the commercial playbooks they’ve honed back home. This also emphasises the size of the prize available to European football from the swelling population of fans based in the United States. Just under half of the incremental revenue opportunity open to United is deemed by CLV to be in America. Partnerships with NFL and NBA teams could be a way for clubs to accelerate awareness and tap into new supporters there who are more comfortable with paying for access and experiences than their counterparts living round the corner from the team they follow.

Where a few weeks ago it

seemed as though three of the ‘big six’ clubs might be on the blocks simultaneously, Liverpool’s American owners now appear focused on raising fresh investment rather than selling, and tales of Middle Eastern interest in Tottenham have waned – at least at the moment. If the test of a club’s global appeal is taxi driver conversations in remote countries, Liverpool pass but Spurs fail. CLV calculates the latter’s US opportunity at just £8m a year, one fifth of United’s. If true – and Spurs chairman Daniel Levy would doubtless be determined to prove it wrong – then this is just one more indication that the gap between the football brand behemoths and the rest is likely to grow ever wider as the sport gets to grips with the potential of Web 3.0.

£ Ed Warner is chair of GB Wheelchair Rugby and writes at sportinc.substack.com

RUGBY UNION

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