Monday 22 May 2023

PROFIT TAX HIKE TO HIT INVESTMENT

FIRMS TO SLASH SPENDING AFTER CORPORATION TAX JUMP

JEREMY HUNT and Rishi Sunak’s corporation tax hike is poised to squeeze the UK economy by mothballing investment, new figures out today show.

Nearly half of all mid-sized companies intend to shelve big spending projects due to the Chancellor and Prime Minister snatching a greater share of company profits, according to a survey by consultancy BDO.

Last month, the rate of corporation tax jumped to 25 per cent from 19 per cent, reversing years of cuts to the headline rate of the profits tax.

BDO said almost a third (31 per cent) of the 500 medium sized companies it surveyed warned the uplift in corporation tax had prompted them to consider leaving the UK.

Pharmaceutical giant Astrazeneca earlier this year decided to build a £320m factory in Ireland instead of

the UK, partly due to Hunt and Sunak’s tax rise.

Corporation tax is a levy on profits above £250,000. Economists have warned raising it weakens incentives for firms to invest in resources that enable them to create more goods and services as doing so takes away a larger share of the return yielded from such spending.

In order to soften the six percentage point tax rise, the Chancellor gave businesses an effective tax cut by allowing them to deduct the whole cost of certain investments from their corporation tax liabilities.

The move is intended to steer firms toward investing by offering them tax cuts conditional on them boosting capital spending. It will last until April 2026 and replaces the 130 per cent super-deduction.

Over two thirds of mid-market firms plan to step up investment to benefit from the tax relief, BDO said.

“The headline corporation tax rate will dampen current business investment plans although the positive reaction to the new ‘full expensing’ capital allowances regime suggests this may only be a short-term effect. It has also highlighted a high degree of concern about the international competitiveness of the UK’s corporate tax regime,” Paul Falvey, tax partner at BDO, said.

Hunt, at the budget last March, expanded free childcare for children aged nine months to five years to most working parents in a huge expansion of the welfare state, which BDO said will make it a lot easier for companies to hire new staff.

A Treasury spokesperson told City A.M.: “Our corporation tax rate is the lowest in the G7 and businesses with profits below £250,000 have been protected from the full rate rise – with 70 per cent of UK companies seeing no increase at all.”

HOUSE prices this month jumped up by the greatest amount so far this year to a record high of £372,894, new figures out today reveal.

The average price of a home coming to market climbed 1.8 per cent over the last month, the strongest increase in 2023, according to property search site Rightmove.

Over the last year asking prices have jumped 1.5 per cent.

Tim Bannister, director of property science at Rightmove, said the “gloomy” predictions for the market

at the start of the year are now “looking increasingly unlikely”.

“Steadying mortgage rates and a generally more positive outlook for the economy are also contributing to more seller confidence, though there are likely to be more twists and turns to come,” he added.

London house prices climbed faster than the national average on an annual basis, up 2.8 per cent to nearly £700,000.

Hackney house prices in east London rose the fastest in the capital, up 5.3 per cent over the last year to £724,000.

Insurance firm AXA tells UK to hurry up on rules for self-driving cars

GUY TAYLOR

INSURERS have called on the UK government to get a move on with legislation for self-driving cars or risk creating a “messy” middle ground for insurance firms where liability isn’t clear.

AXA’s CEO Claudio Gienal has written to Chancellor Jeremy Hunt

calling for clear legislation to be implemented as soon as possible to make sure the technology can be rolled out safely and insured properly.

“From an insurance perspective, we need a clear regulatory framework to determine liability and establish a risk rating for different levels of self-driving

technology,” Gienal said in a letter sent last month seen by City A.M.

“Without this guidance, we are at risk of more advanced assisted driver systems slowly creeping onto today’s roads, causing confusion for drivers and creating a ‘messy middle’ for insurers where liability isn’t clear,” he said.

Gienal added that legislation

must be delivered during this parliament, with the UK otherwise risking becoming “uncompetitive in the global race to deploy this technology.”

Dougie Barnett, director of customer risk management at AXA commercial, told City A.M. that clarity for drivers was the “number one” priority.

“It’s really important to see what’s actually put onto statute,” he said.

Calls for legislation on self-driving vehicles from developers, insurers and politicians have been growing over the last year, after repeated delays and pushback.

£ CONTINUED ON PAGE 2

JACK BARNETT

JACK BARNETT

RECORD HIGH Average price of a house shoots up to £373,000

THREE IN A ROW MAN CITY TRIUMPH AGAIN BUT SHOULD THERE BE AN ASTERISK? P18

OPINION UK’S CHIP STRATEGY MEANS LITTLE WITHOUT TAIWAN P14

STANDING UP FOR THE CITY

It’s time for the government to rethink its corporation tax hike

NEWS that swathes of investment is set to be shelved following the introduction of the government’s corporation tax hike is hardly surprising. Companies and business groups big and small have long cautioned that this would happen as a result of the six percentage point tax increase last month, which came in at the same time as the cut in support for energy bills.

Leading entrepreneur James Dyson said at the start of this year that companies will simply choose to transfer jobs and invest elsewhere. The fact that the BDO survey says that some firms are already thinking about leaving the UK should, again, come as

no surprise.

We can’t say we weren’t warned. Hiking corporation tax was always a wrong-headed decision. It will continue to hurt investment and the private sector and hold back economic growth.

As Lord Karan Bilimoria, founder of Cobra Beer, previously put it: “It is killing the goose that lays the golden egg”. While we fortunately look set to avoid a recession this year,

growth isn’t going to be impressive, and the UK economy needs all the help it can get to make sure it stays healthy. Hunt recently hinted that tax cuts could be on the horizon if and when inflation comes down. But better than expected government borrowing figures –which showed that it borrowed £13bn less than expected last year –means the government has enough room for tax cuts now. It should look to move

LONDON IN WONDERLAND Exhibitors were busy putting the finishing touches to their gardens yesterday ahead of this year’s Chelsea Flower Show, which kicks off today

sooner rather than hold them back as any sort of pre-election giveaway in the future.

It should be striving for a corporation tax rate no higher than 20 per cent to make sure it keeps us competitive on a global stage.

Many firms and investors are still bullish about the UK, and rightly so. Britain remains one of the best places in the world to do business. But it could be more attractive still.

WHAT THE OTHER PAPERS SAY THIS MORNING

THE FINANCIAL TIMES

THE CITY VIEW CHINA BANS MICRON’S PRODUCTS FROM KEY INFRASTRUCTURE

China said that US chipmaker Micron Technology’s products posed “serious network security risks” as it banned operators of key infrastructure from buying them.

THE GUARDIAN FACEBOOK TO BE FINED £648M FOR MISHANDLING USER INFORMATION

Facebook is to be fined more than €746m (£648m) and ordered to suspend data transfers to the US as an Irish regulator prepares to punish the firm for its handling of user information.

THE TELEGRAPH TECH ANALYSTS QUIT EN MASSE AMID TURMOIL AT CITY INVESTMENT BANK

A team of tech analysts have quit en masse at City investment bank Berenberg in the latest sign of turbulence. The analysts are set to move to rival Cantor Fitzgerald, sources said.

City regulators set for fresh scrutiny as ministers push post-Brexit reforms

CHARLIE CONCHIE

MINISTERS are looking to strengthen their oversight of the City’s financial regulators as part of post-Brexit plans to rein in regulatory red tape and make sure they help drive economic growth.

The Treasury is planning to table an amendment to the landmark Financial Services and Markets Bill, currently making its way through parliament, which would strengthen the role of the central complaints body, the Financial Regulators Complaints Commissioner (FRCC), which oversees regulators, a government source told City A.M.

The FRCC allows firms to complain about decisions by the City’s key watchdogs, the Financial Conduct Authority, Prudential Regulation Authority and the Payments Systems Regulator.

Central to the plans will be allowing the Treasury to appoint the FRCC’s chief, rather than the regulators, to carve out more independence for the body from the regulators, the source told City A.M.

An annual report from the FRCC will also be given further weight and regulators will be required to answer where they have not fallen in line with the recommendations of the body.

The Financial Services and Markets Bill is scheduled to begin the report stage in the House of Lords on 6 June.

The move comes after a testy period between the government and City regulators. Moves by the Treasury to introduce so-called call in powers, which would have given ministers greater control over their decision making, provoked a backlash from regulators. Rishi Sunak eventually aborted the plans.

Plans to overhaul the role of the FRCC were first reported by the Sunday Times. The FCA declined to comment. The PSR and PRA did not immediately respond to requests for comment.

Further delays to self-driving rules could deter investment

CONTINUED FROM PAGE 1

Autonomous vehicle regulation was initially announced by Boris Johnson’s government during the Queen’s Speech last May, but was postponed following a change of leadership. The industry has been warning since then that unless adequate legislation is passed before the next general election, investment in the sector could drop.

Ashley Feldman, programme manager for transport at the trade association TechUK, warned that

“any further legislative delay or false starts” in autonomous vehicle technology were likely to “send the wrong message to businesses and investors”.

The Department for Transport did not comment on the legislative delays, but said it is investing £100m over the next three years in UK firms “to explore the potential of this new technology”.

“The self-driving vehicle industry offers an exciting opportunity to create new jobs, make transport greener and safer, and grow the economy,” a spokesperson said.

Gretel

Ensignia

Shell set for AGM showdown over climate action

REBECCA SPEARE-COLE

AND AUGUST GRAHAM

SHELL is set to face a tense annual general meeting (AGM) that could be dominated by clashes over climate action after it saw a record year of profits.

The company will probably see conflicting pressures at the meeting tomorrow as investors look to capitalise on record oil and gas profits while shareholder activists push for faster action on climate change issues.

Climate protesters are also expected to gather outside the venue at the Excel Centre in east London.

Investors will vote on pay packages for 2022, including that of outgoing chief executive Ben van Beurden, who took home £9.7m, including a £7.5m bonus – a jump of more than 50 per cent from the previous year.

It will also be the first time that new boss Wael Sawan, who has worked at

Shell since the 1990s, deals with shareholders as chief executive.

Meanwhile, shareholder activist group Follow This has filed a resolution calling for Shell to tighten its 2030 reductions targets for emissions on the products it sells.

The resolution has been backed by proxy adviser PIRC, which has also called for shareholders to vote against reappointing the company’s chair, Sir Andrew Mackenzie, and oppose its annual report for failing to address climate risks by setting adequate targets.

However, proxy advisers ISS and Glass Lewis have recommended votes against the Follow This resolution.

Shell said it “strongly” disagrees with the activist resolution and welcomes the position of ISS and Glass Lewis.

The Follow This resolution is unlikely to receive enough votes to pass but will pile pressure on the board and the new chief executive.

If it goes ahead, the tie-up will mark one of the biggest legal mergers in recent history

Allen & Overy and Shearman

merger

to forge $3.4bn law firm

offices around the world.

Former CBI boss insists culture was not toxic

JESSICA FRANK-KEYES

FORMER CBI chief Dame Carolyn Fairbairn has insisted the organisation did not have a toxic culture as she yesterday broke her silence on the sexual misconduct scandal that has engulfed the body in recent months.

The Confederation of British Industry (CBI) has come under fire from allegations of sexual harassment and rape made by staff members, first published by the Guardian newspaper.

Now former director-general Dame Caroline, 62, who ran the CBI from 2015 to 2020, has spoken out about her time leading the organisation in an interview with The Sunday Times.

LAW FIRMS Allen & Overy and Shearman & Sterling announced plans to merge late last night, which would create a firm with approximately $3.4bn (£2.7bn) in combined revenues. The tie up marks one of the biggest legal mergers in recent history, forging a firm with 3,900 lawyers across 49

The new firm will be known as Allen Overy Shearman Sterling, or A&O Shearman for short.

“This is truly a game-changing moment for both firms,” Adam Hakki, senior partner at Shearman & Sterling, said.

The proposed merger is subject to a vote of the partners at both firms.

“I feel a profound sense of shock and distress the serious allegation of rape was made on my watch,” she said.

Fairbairn suggested, however, the board may not have defended the CBI as strongly as it could have done.

“I maintain and believe that it was a really good culture, and that it was very far from being a toxic culture,” she said.

New Rolls-Royce boss slams ‘mismanagement’

LUKE THOMAS

THE NEW chief of Rolls-Royce says the company has been “grossly mismanaged”, describing financials the engineering group faced in 2019 as the “worst I have seen in my career”.

In an interview with the Financial Times, Tufan Erginbilgic also defended his recent hires of oil executives from his previous employer, BP.

Erginbilgic took up the reins at the FTSE 100-listed business in January after 20 years at BP where he became CEO.

Erginbilgic has since appointed BP executives Helen McCabe and Nicola Grady-Smith to his team in a senior management shakeup.

Erginbilgic said despite a “deep engineering capability”, employees “have not been led the right way”.

Earlier this year, he made headlines and

spooked investors by labelling the firm a “burning platform”.

Now, after years of underperformance, the company’s early 2023 profit announcements exceeded expectations, with a boost from an uptick in international travel. This, Erginbilgic says, is a far cry from 2019, when even prepandemic financials showed dire operative leverage.

To continue improvements, Erginbilgic says he will be targeting cuts to spending on non-core projects and renegotiations of existing sales and maintenance contracts. There will be a renewed focus on paying down debt and generating cash, to drive a global engineering leader that is “high performing, competitive, resilient and growing”.

The CAA has given Wizz Air until January to settle court judgements made against it

‘UK’s worst airline’ owes Brits a colossal £5m in unpaid refunds

JESSICA FRANK-KEYES

BRITS are owed £5m in unpaid refunds from low-cost airline Wizz Air, a Sunday Times investigation has revealed.

Previously dubbed ‘Britain’s worst airline’, Wizz Air is yet to pay out £4,950,479 across 881 outstanding county court judgments, with claims from £47 up to £10,358. Unresolved

judgements date back to April 2018.

A spokesperson said: “Wizz Air has resolved the vast majority of the CCJ cases and we are in the process of updating the court records to reflect this.”

It comes after the UK’s Civil Aviation Authority criticised the airline in December for “unacceptable” passenger treatment and “far higher” numbers of unresolved complaints.

Ryanair aims to double number of passengers

LUKE THOMAS

RYANAIR chief Michael O’Leary says the company will steal market share from European rivals, aiming to double passenger numbers to 300m per year within a decade.

O’Leary told the Financial Times: “I think the thesis that there’s no more growth in Europe is wrong [and that] Europe is completely tapped out, is wrong.

“As long as we don’t do something stupid — which is a daily challenge in this industry — we will continue to wipe the floor with every other airline in Europe.”

No airline has yet reached 300m passengers in one year, with industry experts sceptical about unbridled passenger growth given a basic lack of demand and broader constraints on the aviation industry through carbon taxes.

O’Leary did recognise a slowdown ahead, predicting Ryanair’s growth will moderate at four to five per cent a year. But he stuck to a forecast for record passenger numbers and this month agreed a $40bn (£32.1bn) deal with Boeing for 300 new shorthaul aircraft.

Tufan Erginbilgic joined Rolls-Royce from BP

M&S set for sales increase despite price pressures

HENRY SAKER-CLARK

MARKS & Spencer (M&S) is set to reveal another rise in sales despite wider concerns over the effect of the soaring cost of living on the high street.

The retailer’s shares have been robust in recent months as it continued to make progress following the turnaround plan launched by previous chief executive officer Steve Rowe. Investors will hope it can point towards a continued upward trajectory in trading when its current bosses update the market on Wednesday.

M&S is expected to reveal another jump in sales for the year to April, with 7.7 per cent growth projected in its food division and a 10.5 per cent rise predicted for clothing and home sales. It comes despite pressure on shopper budgets, as household bills including energy have shot up in cost, causing some Brits to

reassess non-essential spending.

However, in its previous trading update in January, M&S said both its food hall business and clothing and home division saw significant sales increases over the previous quarter.

Shareholders will be particularly keen to see further progress in the clothing operation, which had become a problem area for the company.

Peel Hunt analyst Jonathan Pritchard said the group has benefitted from a continued shake-up of its store portfolio, describing the recent programme of refurbishments as “the best we have seen”.

The retailer said earlier this year it would invest around £500m into its stores, in a move set to create a further 3,400 jobs.

Pretax profits are also expected to nudge higher for the past year, up to £436m from £391.7m.

Stuart Machin became CEO in May 2022

Sainsbury’s bets on style with new online fashion marketplace

LUCY KENNINGHAM

SAINSBURY’s is reportedly planning to launch a new online marketplace for high street fashion brands in a move which will pile pressure on department stores like John Lewis. Looking to diversify its product range whilst capitalising on a strong web traffic presence and vast distribution networks, Sainsbury’s

Pint pourers pocket above average 11.3 per cent pay rise amid staff shortages

JACK BARNETT

PUB WORKERS are raking in some of the biggest pay rises in the UK caused by landlords stepping up benefits in a bid to lure and retain staff, new figures out today show.

Wages for people working in the country’s drinking holes climbed 11.3 per cent over the last year, higher than the hospitality sector’s average 9.5 per

cent increase and the UK-wide 6.6 per cent jump, according to a study by Caterer.com.

Young and inexperienced pint pourers pocketed the best salary increases at 11.8 per cent, signalling a tight labour market is pushing wages up for new starters.

Kathy Dyball, Caterer.com director, said: “As the long-standing skills shortage continues to impact the

sector, hospitality employers are focused on offering competitive salaries and benefits to attract and retain the people they need.” London pub workers trousered among the highest pay rises across the UK, closely followed by those working in the north west. In the capital’s hospitality industry, pay rose 11.5 per cent over the last year, the research found.

aims to stock a range of fashion brands online, according to The Times.

Next and Marks & Spencer are both benefiting from sales of third-party clothing brands on their sites.

The new initiative is being led by former John Lewis boss Paula Nickolds, who now heads Sainsbury’s non-food business.

Sainsbury’s was contacted for comment.

Big Mac beef: LGIM takes aim at McDonald’s

CHARLIE CONCHIE

ASSET management giant Legal & General Investment Management (LGIM) is set for a showdown with McDonald’s this week as it leads a fight against the firm’s use of antibiotics in its meat production.

LGIM claims McDonald’s “overuse” of antibiotics could fuel the threat of global anti-microbial resistance.

The top-20 shareholder in McDonald’s has co-filed a resolution ahead of its shareholder meeting this week calling for the company to align with World Health Organisation guidelines.

McDonalds in 2018 pledged to slash the amount of antibiotics used.

Some argue the firm has failed to provide proper updates since then.

LGIM’s move against McDonald's has won the backing of Amundi and Hesta, the Mail on Sunday reported.

However, influential shareholder group ISS struck a blow to the firm earlier this month by recommending shareholders rebuff LGIM’s move.

It comes as LGIM has been ramping up pressure on boards for action across ESG issues.

McDonald's said it is “working towards the responsible use of antibiotics in our supply chain”.

The plans will see Sainsbury’s edge further into the remit of department stores

Staff shortages have seen pubs up their pay offerings to attract and retain staff

‘I’m a bull on the UK’: Lazard chief defies doom and gloom warnings

CHARLIE CONCHIE

THE CHIEF of financial advisory and asset management giant Lazard has said he is a “bull” on the UK despite warnings of the City’s decline on the international stage.

Kenneth Jacobs, who has served as chief of the storied New Yorkheadquartered firm since 2009, said Lazard was still upbeat on the prospects of the UK and believes the country will “surprise to the positive”.

“I’m a bull here. In many ways the UK has this immense amount of intellectual capital in all the right places right now,” Jacobs told The Sunday Times in an interview. “The university system in the UK, it’s gone from good to great.”

Jacobs is soon expected to step down from his role at Lazard and hand the reins to Peter Orszag, who currently runs the investment bank’s financial advisory unit, Reuters reported on Friday.

Jacobs’ comments on the UK will

Tech spats show UK firms will be held to account

CHARLIE CONCHIE

MICROSOFT and Revolut’s high-profile run-ins with City regulators do not signal an underlying hostility to tech and instead show regulators in the UK will not “roll over and play dead”, a top London tech chief has said.

City regulators have faced a barrage of criticism in recent weeks from executives at the two firms.

Microsoft’s chair Brad Smith claimed the Competition and Markets Authority’s move to block its merger with Activision Blizzard, on the grounds that it would hamper competition in the nascent cloud gaming market, “shake[s] the confidence among the business community in the UK”.

Meanwhile, Revolut’s founder Nikolay Storonsky (pictured) has again hit out at the Prudential Regulation Authority (PRA) and Financial Conduct Authority over its failure to win a banking licence, claiming bureaucracy and the slow pace of movement would force it to expand overseas.

“We have experienced a slowing down. You never know what needs to be done

here,” Storonsky told The Times.

The moves have triggered fears that regulators are damaging the UK’s status as a tech hub. But industry grandee

Russ Shaw, the chief of Tech London Advocates, told City A.M. it showed the strength of the UK’s regulatory system after leaving the European Union.

“I think this is a good signal that our regulators are not just going to roll over and play dead, but they’re going to take their job seriously and scrutinise,”

Shaw said. He added that while the two cases were unique they showed regulators were intent on “getting companies to behave sensibly and responsibly, and [to] have some accountability”.

Revolut, once Britain’s most valuable private company, has faced a two-year battle to win a banking licence. Then-finance chief Mikko Salovaara said in March the licence was “imminent” but the Telegraph reported last week that the PRA was due to reject its application. The firm is now looking to bolster its presence in the EU as a result of the regulatory run-in, though it has insisted “London is our home”.

be well received in City circles, however, after a gloomy period in which City grandees have fretted over the decline in status of the UK on the international stage post-Brexit as a number of firms ditch the capital in favour of New York.

Lazard has also faced a tough period, in which it has been rocked by the slump in dealmaking. The firm was recently forced to lay off 10 per cent of staff globally, about 340 jobs, to contain its costs amid the chill in deals.

GREAT LEAP FORWARD? Meta in talks with augmented reality start-up Magic Leap

Experts split after buybacks hit record high

CHRIS DORRELL

EXPERTS have raised questions about the benefits of share buybacks, after companies bought back a record number of shares last year.

Buybacks reached record levels globally in 2022 according to figures from Janus Henderson, rising 22 per cent year-on-year to hit $1.3 trillion (£1.04 trillion). Buybacks were worth 94 per cent of dividends in 2022, compared to 52 per cent in 2012.

In the UK, the increase was significantly greater, nearly tripling, with $70.53bn shares bought back in 2022 compared to $24.61bn in 2021.

Shell and BP were the lead contributors, buying back $19bn and $11bn worth of shares respectively.

The scale of the buybacks has raised questions about the best way for firms to reward shareholders, with some experts arguing they are not as beneficial as dividends.

Janus Henderson’s Ben Lofthouse said: “Buybacks cannot always be relied on to enhance shareholder returns. Their discretionary nature makes them more volatile, as evidenced in 2020’s Covid disruption when they fell dramatically.”

He noted shareholders who rely on an income stream from their investments often prefer dividends.

Others disagreed, however, with Hargreaves Lansdown’s Sophie LundYates calling the increase in buybacks a “marker of confidence in the UK’s financial sector”.

Close Brothers hoping to soothe investor jitters after bruising year

CHARLIE CONCHIE

MERCHANT banking group Close Brothers is hoping to win back the confidence of the City this week after a bruising few months.

The FTSE 250 firm will issue a trading update to the City on Wednesday and is looking to soothe investor jitters after its profits

cratered nearly 90 per cent at its half year update in March.

The firm said in March it had set aside £100m to cover bad loans from Novitas, dragging its adjusted operating profits down to £12.6m in the six months ending January 2023.

Close Brothers acquired Novitas in 2017 but ceased lending from the business in 2021, with the division

now in run-off.

Analysts are expecting adjusted operating profits for the full year to come in at £115m, less than half of the £235m racked up last year, according to a company-compiled consensus. Analysts at Hargreaves Lansdown said there was now a “lot riding on this trading statement”, with recent updates “testing investors’ patience”.

Lazard boss Kenneth Jacobs said he believed London would surprise the naysayers

META is continuing to pour its efforts into its Metaverse dreams, with the firm reportedly in talks with AR start-up Magic Leap over a multiyear deal, according to the FT. The Metaverse, which the firm has invested $10bn into this year, has divided investors.

THE NOTE BOOK

Message received: Time for UK banks to get clear on Whatsapp

IN THElast year, multiple banks in the US have paid a high price for staff use of unmonitored private messaging services and personal devices. The most recent one –two weeks ago –received a $15m (£12m) fine from the US Securities and Exchange Commission (SEC). To date, the penalties add up to more than $2bn. Executives and staff at these institutions have also seen their pay impacted and jobs lost by various compliance failures, including the unmonitored use of Whatsapp for business matters.

It won’t be long before the UK financial sector likely experiences a similar wave. The Financial Conduct Authority (FCA) is already looking into the matter, with banks facing ongoing questions about their use of private messaging, as the watchdog decides whether to launch a full probe.

It’s easy to dismiss compliant communication as merely cautious red tape, but it matters. The 2008 financial crisis showed the long-lasting impact that irresponsible financial activity can have, and the need for regulators to be able to easily review communications.

Since then, regulation has sought to create more transparency and accountability in the industry, but these methods have been disrupted by the rise of technology and hybridworking practices.

As well as negatively impacting share prices and irritating investors, failure to work in line with FCA rules is a symptom of a lack of internal control, which poses serious reputational challenges for banks. Particularly in London, whose crown as Europe’s largest stock market has already been lost to Paris, this is an issue banks can’t afford to get wrong.

Ultimately, the vast majority of people are not aiming to break the rules. Banking and financial services are all about relationships, and there can be a tendency to “let things spill” into channels which are more suitable for personal exchanges. It is key that financial firms are incredibly proactive on this front, using the tools available to ensure the right controls and compliance mechanisms are in place to foster collaboration and meet clients where they are –be it Whatsapp, Wechat, LINE or SMS.

REVOLUT RULING

Despite a two-year campaign from Britain’s most valuable fintech company, it seems the Bank of England is inclined to reject Revolut’s application for a UK banking licence. It’s been reported the problem might be to do with Revolut’s balance sheet and a concern around reporting figures on time. While this matter might get resolved, one important element to double down on is regulatory compliancereporting practices across the financial sector as a whole. Revolut is a poster child of British fintech, and its ability to be transparent and demonstrate financial controls matters.

£ Following the collapse of SVB and crypto ‘earthquakes’, the government has proposed new legislation in the Financial Services and Markets Bill currently making its way through the House of Lords. While it’s healthy for regulation to be periodically refreshed and scrutinised, this shouldn’t come at the expense of stability in the financial system, especially at a time of increasing volatility. For regulatory frameworks to cope, they will also need to embrace new technologies. Tools like machine learning and open-source collaboration can help finance teams keep ahead of new technology trends without sacrificing compliance requirements.

AI AND MACHINE LEARNING

AI is enjoying a real moment in the sun –and what’s exciting from a financial perspective is how leveraging it might help improve decision-making and reactions to market changes in real time. In particular, we’re really excited about natural language processing (NLP) and sentiment analysis, which will allow finance professionals to gather valuable insights from unstructured data, like news articles and earnings calls, to gauge market sentiment, assess public opinion and make more informed investment decisions. We’ll be discussing this and more at Symphony Innovate tomorrow (23 May) at The Brewery in Barbican, central London.

Where interesting people say interesting things. Today, CEO of Symphony Brad Levy writes ahead of Symphony Innovate

City A.M.’s energy editor Nicholas Earl delves into the sector’s challenges in his weekly column

Enough with excuses, energy suppliers must up their game

BIG WINS FOR NORTH SEA SPECIALISTS

Twelve companies last week were awarded a total of 20 licences to develop carbon capture storage offshore, in Britain’s first licensing round for such projects from the North Sea Transition Authority. The big winners include Enquest and Neptune, which were granted four and three licences respectively –hopefully providing development potential to two North Sea companies battered by the windfall tax.

HOUSEHOLDS WILL FOOT THE BILL TO FIGHT SEWAGE

OFGEMwill meet this week to establish the latest update to the quarterly price cap, with energy super-forecasters Cornwall Insight predicting a sharp drop from £3,280 per year to £2,053 per year – meaning a potential 30 per cent plus reduction in household energy bills this summer.

While this is still double pre-energy crisis trading levels of around £1,000-£1,200 per year, it reflects a huge decline in gas prices and easing conditions across Europe, which few initially predicted following Russia’s throttling of gas supplies into the continent last summer.

Such a freefall in wholesale costs opens up the prospect of a competitive energy market again where customers are offered cheaper deals from suppliers, with energy firms grappling with each other for customers to grow their base.

It is in this context that the latest wave of Ofgem fines is so disappointing, with the regulatory crackdown exposing a market that cannot be trusted as trading conditions ease. Last week, Ofgem demanded three suppliers fork out £8m to deal with customer compensation failures – with the guilty energy firms having delayed or failed to make compensation payments for money owed to households.

This egregious behaviour in a cost of living

crisis was committed by suppliers across the spectrum, from energy giant Octopus to EON’s green division to challenger supplier Good Energy.

EON Next has paid out a total of £5.5m to almost 95,000 customers, while Octopus Energy has forked out approximately £750,000 to 19,000 customers, Meanwhile, almost 350 Good Energy customers received a combined total of £18,000. This outcome was certainly embarrassing for Octopus and EON, two of the UK’s ‘Big Six’ suppliers.

A few days later, Good Energy found itself in Ofgem’s crosshairs again, alongside Ovo Energy, with both firms set to pay £4m for overcharging customers. This consists of £2.7m in combined overcharged fees and Good Energy committing £1.25m to Ofgem’s voluntary redress fund – with the charges affecting over 6,000 Good Energy customers and over 10,000 Ovo Energy customers.

Both Good Energy and Ovo Energy market themselves on empowering customers to make greener choices, with the support of a supplier that is there to help them on a pathway to cleaner, cheaper bills.

This makes their failures all the more sickening – as it turns what customers should believe to be sincere messaging about improving their green lifestyles into, frankly, little more than weasel words.

PREPAYMENT SCANDAL STILL LOOMS

These latest shortcomings from suppliers also come in the midst of the prepayment meter crisis – where British Gas was exposed to be using third-party operators to break into people’s homes and install prepayment meters at vulnerable households –in an investigation first revealed by The Times. However, the reality is the crisis was industry wide, as suppliers pushed through the forced installation of nearly 100,000 prepayment meters last year –despite record bills.

Alongside British Gas, Scottish Power and Ovo Energy were responsible for over 70 per cent of all forced installations with a total of 66,187 devices fitted under warrant.

Ofgem has since required suppliers to sign up to a new code of practice for customers, which includes energy firms having to make at least 10 attempts to contact a customer before installing prepayment meters.

Energy users over the age of 85 without someone else in the home will also be exempt from forced prepayment meters. Such limits coming into the energy market exposes how poorly suppliers handled prepayment meters during a period of immense vulnerability for households.

It is also worth remembering that the

energy crisis pre-dates the Ukraine crisis. Dozens of suppliers collapsed the summer before Russia invaded Ukraine, with firms –many built on flimsy, unsustainable business models –unable to cope with rising energy costs due to their limited hedging and poor management.

Now, we have been left with a smaller energy market and fewer choices for customers, where 90 per cent of the market is owned by Big Six suppliers – a reality the government and regulator sought to avoid when they liberalised the energy market nearly a decade ago.

Energy firms must be seen as trustworthy to appeal to customers.

So far, Ofgem has been lenient in its cleanup of the sector – and hasn’t gone through with imposing policies such as ringfencing requirements for customer balances. It has argued this is because it values innovation and creativity from potential new players in the market.

Energy firms have been lucky up to this point, with the focus of the energy crisis being Russia’s invasion of Ukraine, and the government scramble to support households. However, Ofgem could be left with little choice but to take tougher measures unless suppliers up their game –and stop inviting such negative scrutiny with poor customer service.

Households will have to pay for water companies to stop sewage spills, admitted Ruth Kelly, chair of Water UK. She told Sky News that the £10bn investment from water companies to stop sewage spills will be paid for by customers through “modest increases to their bills”. Kelly argued that this was essential to start “the biggest transformation project since Victorian times”. She said: “The way the system works is that over the lifetime of the assets, customers do pay that money back in modest increases in their bills.”

SEND US YOUR THOUGHTS

What can we do to improve energy security? Email energy editor Nicholas Earl at nicholas.earl@cityam.com

Apprenticeship levy needs reform, says former education secretaries

JESSICA FRANK-KEYES

CALLS to link the apprenticeship levy to Britain’s immigration policy have been backed by three former education secretaries.

Lord David Blunkett, Sir Gavin Williamson and Nadhim Zahawi have lent support to a report calling for urgent changes to the government’s

levy on firms to pay for apprenticeships – including linking the scheme to visa rules around occupations facing worker shortages.

A total of £4.3bn has been raised and gone unspent since 2018 due to barriers preventing small businesses making the most of the scheme, the Policy Exchange think tank says.

Zahawi, education secretary from

2021 to 2022, said: “Employers should be able to use the levy to train up home-grown talent – including on shorter and more flexible courses –instead of being forced to rely on immigration to fill these vacancies.”

A government spokesperson defended the levy, which they said “thousands of employers” make good use of.

The number of young people starting apprenticeships has fallen sharply since 2015

CITY DASHBOARD YOUR

BEST OF THE BROKERS

UK inflation set to finally slip out of the double digits

UK INFLATION is poised to tumble to its lowest level in over a year in what is expected to begin a steady descent from its multi-decade highs, new figures out this week are likely to reveal.

The rate of price increases in April is tipped to have dropped markedly to 8.2 per cent last month, down from 10.1 per cent and to the lowest level since March 2022 when it rose to seven per cent, according to City analysts.

Living costs have been rising rapidly for more than a year, initially driven upward by supply chains buckling under the weight of a sudden surge in demand after Covid-19 lockdowns were ditched.

Russia’s full-scale invasion of Ukraine lit a rocket under international energy prices, pushing up UK household energy bills to what could have been more than £4,000 without the government stepping in and capping bills at £2,500 last year.

While that intervention has averted the biggest hit to average living standards on record, it has knocked Britain’s finances, forcing the government to borrow £22.4bn last month, markets expect.

A combination of poor weather and the Russia-Ukraine war jolting raw material production has also squeezed food supplies, putting upward pressure on supermarket prices, which have climbed nearly a fifth over the last year. However, the cost of living crisis that has knocked the poorest households’ finances is poised to slowly ease as the year progresses, but food price inflation may take longer than headline consumer prices to decelerate.

Any signs that core inflation –which is running over six per cent –is failing to fall substantially in response to the Bank of England’s 12 successive interest rate rises could seal another increase at the Monetary Policy Committee’s next meeting on 22 June.

Bank governor Andrew Bailey and other rate setters will break down the reasons why they lifted borrowing costs earlier this month at a grilling from MPs on the Treasury Committee tomorrow.

Latest purchasing managers’ indices out tomorrow could show the UK economy is racing away from the muchtipped recession, while retail sales numbers from the ONS on Friday are poised to show families are trimming spending in response to high inflation.

Easyjet’s pretax losses fell in line with expectation last week at £411m, while net debt of £200m was unchanged. Easyjet holidays expects to exceed expectations for pretax profits in FY23. Peel Hunt analysts have doubled down on their buy rating and set a target price of 650p.

Peel Hunt have doubled down on their advice for investors to row back positions in DNA and RNA sequencing specialist Oxford Nanopore after an update to investors last week. Analysts said the update “does not include developments that we were not aware of”. They say reduce holdings of the stock and set a target price of 170p.

Analysts at Peel Hunt have doubled down on their buy rating for homebuilder Vistry after the firm revealed “robust” trading over the past six weeks and hiked its fullyear profit expectations by £10m to “in excess of £450m”. Shares have risen 31 per cent in the year to date. Peel Hunt says buy the stock with a target price of 1,075p.

INFLATION EXPECTED TO DROP, FINALLY “Top of the docket this week will be Wednesday’s inflation figures from the Office of National Statistics (ONS). We’re almost certain –provided nothing catastrophic happens to the computers at ONS HQ –to see it drop somewhere to around eight and nine per cent. That’ll kick start this year’s steady decline.”

JACK BARNETT, ECONOMICS EDITOR

OPINION

EDITED BY SASCHA O’SULLIVAN

To achieve a strong semiconductor strategy, we need to keep Taiwan safe

Eliot Wilson

LAST week Liz Truss (she was prime minister, briefly) visited Taiwan on a five-day tour. Proving that, like a stopped clock, she is still occasionally right, she warned her audience that the Chinese president, Xi Jinping, had ambitions to seize control of the island, by force if necessary, and that the West, “those of us who believe in freedom and democracy”, had to be prepared to defend Taiwan.

This matters, and Truss was right to say it. Freedom and democracy aside, Taiwan’s semiconductor industry produces a fifth of the world’s supply, a hefty $115bn, while two Taiwanese companies are the biggest global manufacturers of microchips. Any interruption to manufacture or supply because of a Chinese strike against Taiwan would have disastrous effects for the rest of the world.

For once the UK is not wholly on the back foot. The March 2023 “refresh” of the Integrated Review, our foundational geopolitical and national security document, promised a “Semiconductor Strategy” to boost our manufacturing base and strengthen the supply chain for importing semiconductors as part of wider economic security measures. This will be a key re-

sponsibility for one of the new bodies the prime minister created in February, the Department for Science, Innovation and Technology.

The scheme, announced by the government last Friday, is a 20-year plan, backed by £1bn over the next decade, to improve access to infrastructure, increase research and development in semiconductors and boost international cooperation. In particular, the UK has committed to collaborate with Japan’s Ministry of Economy, Trade and Industry to cooperate on research

and development, share skills and jointly improve resilience in supply chains. It is part of a wider agreement between the UK and Japan dubbed the Hiroshima Accord.

The ambitions of the strategy address obvious elements of government policy. It is designed to improve the UK tech sector (Rishi Sunak wants us to be recognised as a “tech superpower” by 2030), contribute to overall economic growth, increase the domestic supply of semiconductors and make our supply chain more resilient.

The main criticism of the strategy is that recurring theme of British policymaking: it is long on ambition and rhetoric, and short on actual funding.

£1bn spread over 10 years is not a significant investment in global terms— one tech boss pointed out that building a basic semiconductor plant from scratch would cost more than that— and it is dwarfed by the sums which have been announced in subsidies to the industry by the US, the European Union and China.

Framed more optimistically, it is a

Even Biden’s green subsidies can’t solve the climate crisis without private money

ANYONE opening a newspaper over the last few months will have seen the headlines - forest fires, droughts, floods. Addressing the climate crisis can seem like an uphill battle. But in the City there is cause for optimism. Business is putting its money where its mouth is: since 2021 GFANZ members, who hold $85tn of private capital, have made commitments to hitting net zero emissions targets by 2050. They include more than 550 financial institutions, insurers, and asset managers across 45 countries.

The road to net zero requires financing, and lots of it - about $100tn or more between now and 2050, according to some estimates.

With our national purse under strain, private finance will need to bridge the gap. But that requires the government to create the right business environment to catalyse growth.

This is what I’ll be discussing at the City of London Corporation’s annual Net Zero Delivery Summit (NZDS) at Mansion House this week. The Summit

Nicholas Lyons

will convene government representatives, financial and corporate leaders, and trailblazing climate solution providers from around the world.

It’s impossible for governments alone to provide the scale of financial support required to address the challenge. Even the $370bn worth of investment, grants and subsidies in the US Inflation Reduction Act is a fraction of what is needed.

But what the US has got right is the role that financial incentives play in unlocking investment in key industries for decarbonisation. There has been recent news that the development of the UK’s electric car battery industry is under threat, and we saw the collapse of battery manufacturer Britishvolt earlier

this year. A more concerted effort is needed to direct capital into these crucial new industries.

But it’s still a long road between here and unlocking the significant investment required. I agree with Chris Skidmore’s recommendation to review how policy can incentivise investment in decarbonisation via the tax system and capital allowances.

There’s also plenty of untapped opportunity in the UK’s pensions sector, which has approximately £3tn in assets under management. Unlocking this capital for high-growth firms such as those in green tech can be a gamechanger. The government should consider allowing smaller defined contribution pension schemes to be consolidated to support this approach.

I’m working with leading investors, asset-managers, and firms collectively to invest in a £50bn Future Growth Fund assembled from 5 per cent of the UK’s defined contribution pension pot. The fund could invest in a wide range of green technologies.

While investment in emerging sectors

is important, we mustn’t forget the pivotal role of transition finance in delivering net zero. From aviation to transport, we will only achieve net zero if the owners of high-emitting assets are supported in their efforts to decarbonise. Assigning a scarlet letter of shame to these industries will not help us reach our climate goals.

We need to ensure companies at different stages of their journey towards decarbonisation are still able to access private finance. Not just to support their day-to-day activities, but also to facilitate their effort to reduce emissions in a manner that is financially and environmentally sound.

Net zero is the growth opportunity of the 21st century, worth up to £1tn to UK businesses by 2030. Positioning the UK as the go-to partner for countries and companies looking for capital and expertise and ensuring we have the right policies in place can empower us to reap these rewards.

promising start on a critical issue. It will be a test case for the new DSIT (currently steered by former work and pensions secretary Chloe Smith, as Michelle Donelan is on maternity leave), and it is well timed politically. The prime minister and the foreign secretary are in Japan for the G7 Summit, and the Hiroshima Accord with Japan is a demonstration of the UK’s ambition and reach post-Brexit. It anchors our attention firmly in the Indo-Pacific region to which the Integrated Review has “tilted” British foreign policy.

It is striking that the document released on Friday contained no mention of China or Taiwan. As often in diplomacy, one learns a great deal from looking at the white spaces. This is as much a South China Sea strategy as it is about semiconductors, and in this lies the real problem with the government’s plans. Yes, it may be underfunded, but, much more pressingly, time is short. President Xi’s designs on Taiwan are not medium- or long-term, vague intentions for the 2040s or 2050s. This is proximate.

Xi has previously emphasised that the issue of Taiwan “cannot be passed on from generation to generation”, and he has told the Chinese military to be ready for an assault on the island by 2027. We are more likely to see a naval blockade, in the first instance, than a full-dress amphibious invasion, but the crisis is coming. No matter how well-intentioned our plans for self-sufficiency, we will still need Taiwan. So are we willing to fight for her?

£ Eliot Wilson is co-founder of Pivot Point and a columnist at City A.M.

SWEET REVENGE

Vladimir Putin faced the greatest defeat in Ukraine so far last week as the price of European natural gas fell back to normal trading levels. It could finally signal an end to sky-high energy prices across Europe and the UK. The cost of energy has been a key weapon in Putin’s arsenal, after much of the West imposed sanctions

£

Nicholas Lyons is Lord Mayor of the City of London Corporation

Rishi Sunak was in Japan last week as he promised to work with Tokyo on a semiconductors strategy

WE WANT TO

LETTERS TO THE EDITOR

How we should regulate crypto

[Re: Treasury Committee’s call for digital assets to be regulated same way as gambling industry is slammed by crypto leaders, 17 May]

The TSC’s proposal to regulate crypto as gambling oversimplifies a complex issue. Undoubtedly, the risks associated with cryptocurrencies are significant and it’s crucial to make consumers aware of these. However, shoehorning it into a gambling framework risks oversimplifying the vast potential of this technology. Crypto is the foundation of several ground-breaking technological applications, including Decentralised Finance, Smart Contracts and NonFungible Tokens. A regulatory framework designed for gambling may

not be equipped to nurture these aspects of the industry. Rather than a radical shift to gambling regulation, we need a more comprehensive and nuanced approach to financial regulation. Such an approach would not only provide robust consumer protection but also foster sustainable growth within the industry. The EU Economic and Financial Affairs Council has approved the Markets in CryptoAssets regulation which endeavours to offer an effective regulatory framework for a range of cryptocurrencies, digital assets, utility tokens and stablecoins. A similar approach could be taken by the UK following its consultation on legislating the Financial Services & Markets Bill. The discourse around cryptocurrency regulation demands a detailed and multifaceted exploration, which a one-size-fits-all solution may not adequately provide.

FAMILY-FRIENDLY, PLEASE Young parents choose supportive workplaces

We can’t wean politicians off the Nimbys, so we must get them on board with housing

Noah Khogali

IF THE local elections proved anything, it’s that none of the major parties are, at present, capable of weaning themselves off of the Nimby vote. The Lib Dems, Labour, Tories and Greens all opposed local house building as an electoral tactic, further plunging young people deeper into the abyss that is the UK's chronic housing shortage. To appeal to the younger generation and incentivise Nimby voters to allow new housing developments in their communities, lawmakers must generate new ideas.

More than half of under 35s actively favour companies that have familyfriendly policies in place, according to research by Bright Horizons. Sixty-seven per cent of working parents have also admitted using annual leave to cover childcare when subsidised back-up care days run out.

EXPLAINER-IN-BRIEF: CAN RISHI SUNAK WIN OVER THE AI MARKET?

Late last week, at the G7 in Japan, Rishi Sunak admitted the UK might need to work on new regulations to tackle AI, calling for greater “guardrails” over its development. It was an acknowledgment the UK government might have to look again at its laissez faire approach. Back in March, the government set out its strategy on artificial intelligence. It said AI companies would have to follow five “principles”, rather than laws, when developing technology. Regulators would then have to set out the rules of the game. The UK is favouring a

pretty unregulated environment to lure in lucrative AI companies who find the regulatory environment within the EU too tight. Many big business voices have been supportive of this approach. The AI industry contributed £3.7bn to the UK economy last year, employing more than 50,000 people. But striking the right balance is difficult, and while the government wants to get the regulation right to make sure AI companies develop and stay in the country, it must also ensure the industry’s products are safe.

ELENA SINISCALCO

One way is a nationally organised community benefit fund scheme for rural towns or villages, to support new development without losing the Nimby vote. Funds like these are typically used by wind farm developers to redirect some of the profits of their development into a pot of money for use on local community-led projects. Whether they are used to fund a new village hall, start-up grants for small local businesses, or higher education bursaries for local people, the funds mean those who struggle to see the long term benefits of a development receive a tangible and immediate financial benefit for their community. If many communities are willing to sacrifice their view in the form of a new wind farm, for investment in their communities, they are likely to do the same for housing developments. By replicating this policy in a housing context, lawmakers could convert—or at least placate—voters worried about developments.

This is especially true in rural areas where people maintain a strong sense of community. Too often, government and charitable development funding focuses on cities and urban communities, leaving rural communities feeling as though they are paying the price for development and rising populations without seeing any benefit. Many in rural areas consider house building a burden imposed on them that yields no local benefit.

There would, for this to work, need to be give and take on behalf of both the government and developers. Developers would need to stump up extra cash to make it work, and will almost certainly argue they can’t afford to do so. According to a report by the Home Builders Federation, extra taxes and regulation add around £4.5bn onto developer costs every year. To convince

builders to pay even more, the government would need to agree to reduce those costs by at least 25 per cent. If it becomes easier to build in rural areas, developers would be able to construct more homes and create bigger profit margins for themselves, even if it does cost extra in the short term.

In the last year, there were 205,000 homes built across the UK—95,000 short of the government's target. If the government and developers contributed £5,000 each into a community

benefit fund, per home built in a community (presuming the 300,000 target was met), then it would result in a £3bn investment in local communities across the country, at a cost of £1.5bn to the government. For context, that is less than 1 per cent of the NHS budget. The money could be given to the local Community Council (or local authority to spend on community initiative projects within the affected community), to ensure that it is spent as close to home as possible.

In the run-up to the next election, attitudes to house building will be key to winning the young, professional vote. Community benefit funds may be our best option to allow communities to immediately invest in projects that matter to them and provide a clear, tangible benefit to housebuilding for those who aren't able—or willing—to see it at the moment.

£ Noah Khogali is a political commentator with Young Voices UK and a Scottish Conservative Councillor

Many in rural areas consider house building a burden imposed on them, yielding no benefits

Ludovico Lugnani Solicitor at BDB Pitmans

Michael Gove admitted the government won’t meet its target of 300,000 homes a year

TRAVEL

In the ancient Italian capital, revered crumbling relics stubbornly hold position on every corner. Its grand theatrical architecture seduces and its slow decay over millennia has established Rome’s uniquely elegant style that has earned the city the accolade of the most visited location in Italy.

Rome’s recent hotel additions respect its past but embrace the tastes and needs of the modern, remote working traveller. A number of contemporary hotels have opened in the last year from some of the trendiest hotel brands. The W, Soho House, Six Senses and the Hoxton have all launched in neighbourhoods previously overlooked by tourists. We round up four of the best new hotels.

THE HOXTON

Just like its London big sister, the Hoxton Rome is in the trendy part of town. The Hoxton Rome is the 10th to open from the brand and for such a stylish stay, is great value for money. The hotel’s location in the northern suburb of the Salario district has some of the city’s most beautiful parks, coolest cultural spots and arguably best gelato on its door step. Leafy Villa Borghese, the MARCO (Museum of Contemporary Art) and the MAXXI (National Museum of 21 st Century Art) are all within walking distance. Whats more, being in a largely residential area enables greater community immersion, and I’d thoroughly recommend exploring the local area on one of the hotel’s bicycles. The Hoxtonmakes sure none of the mundane elements of hotels can be felt by guests: the reception desk is tucked into a corner surrounded by cosy velvet sofas and almost too many plants, making check in a pleasant experience, and the relaxed and reasonably priced Italian-Californian ‘Beverly’ restaurant is a delight. Meander through the working space, coffee bar and takeaway counter, which blend into one light flooded space, expanding out to a shady outdoor terrace. It’s a community space too, enabling guests to hang out with locals over coffee or aperitivo.

The rooms celebrate the hotel building’s former 1970’s features with recovered Murano glass chandeliers, parquet floors, statement headboards and brass lighting features throughout. Its an excellent choice for solo or slow travellers wanting somewhere stylish but reasonably priced.

SOHO HOUSE ROME

Just beyond Rome’s ancient walls in the gritty neighbourhood of San Lorenzo, the Soho House network has opened another exquisite hotel and hangout exclusively for its members. San Lorenzo is a gritty, artistic, student neighbourhood located just north of Termini station, where creatives mingle among coffee shops, indie boutiques, record stores, and pop-up cinemas.

Exemplifying the area and not to be missed, is lunch at Pastificio, a contemporary osteria with a retro atmosphere in a former pasta factory. You couldn’t find somewhere more Italian. Part of the art foundation Fondazione Pastificio Cerere, grab lunch, see an exhibi-

FOUR FABULOUS NEW STAYS IN ROME

tion and feel the foundation’s creative energy. The 10 storey, retro-styled ceramic tower in Rome’s arty quarter is a cool haven whether at work, play or burning the candle at both ends. The House has 49 bedrooms and 20 long stay apartments, and most have balconies overlooking the city. Rooms have Roman Graniglia flooring and other elegant touches include the locally made Italian leather furnishings and hand painted ceramic bedside lamps, a special collaboration with Italian designer Bitossi. Art Works by Lazio-based and Italian artists feature throughout the house.

The ground floor workspace has a coffee and snack bar, and the spa offers wellness modalities such as cryotherapy and IV-drip therapy. The gym has

views of Rome from the tread mill, and there’s a boxing gym.

Once all work is done, head to the 10th floor. Take in the 360 degree views across the city from the pool or a lounger with something from the bar. Cecconi’s Terrazza restaurant offers Italian favourites. Dine among the vines and lemon trees; on the menu you’ll find handmade pasta and seafood such as lobster spaghetti, as well as wood fire pizzas. The layout means the area feels relaxed but buzzy during the day, and not too overcrowded in the evenings. Best for remote workers and travellers wanting multiple facilities in one building.

THE W ROME

The W Rome boasts an energetic and

bold interpretation of luxury inside a historic palazzo. With its 162 rooms and suites, its design is unapologetically brash, celebrating 1970’s glamour with bold colour blocking and dramatic graphic patterns. Throughout, an eclectic mix of colourful furniture clashes with stone walls and marble basins representative of the building’s past. Luxurious room design details include wooden herringbone patterned floors and block marble surfaces. Many rooms boast iconic views, with some overlooking the Istituto Svizzero, and many offering private terraces.

Giano restaurant, headed by chef Ciccio Sultano, offers authentic Sicilian cooking, I’d recommend the flame grilled lamb chops. Guests party to DJ

A range of new boutique hotels make Italy’s mostvisited destination hot right now, says Justine Gosling

A range of contemporary hotels have opened over the past year or so from the trendiest brands like Soho House, Six Senses, W and Hoxton

The Hoxton

The W Rome

sets at the buzzing W Lounge, served by staff in informal silk pajama style uniform. In the basement, Italian fitness athlete Pietro Boselli is at the helm of the first FUEL X Petra high tech training programme. On the top floor, the Otto roof top bar and pool offers exceptional views across many historic sites. Recommended for travellers who want to be at the centre, near to Rome’s most popular attractions, and in a lively hotel.

SIX SENSES ROME

Following on from openings like the Aman New York, one trend for city centre hotels is to try and make the guest feel like they are anywhere but a bustling metropolis. With the Aman, it’s the luxury of space and silence,

high above noisy, crowded Manhattan, and with Rome’s Six Senses, it’s the gift of nature.

In a 15th century building a short walk from the Pantheon and Trevi Fountain, Six Senses Rome boasts generous communal spaces where flora and fauna play a key part in helping you relax.

The hotel speaks about “imaginativeplanting, natural light, and breezy open spaces” and the property was made using local Italian techniques and materials. Naturally, there’s some fabulous eating and drinking, but the spa is what catches our attention: it features Roman bathing experiences, such as three plunge pools at different temperatures for their soothing and healing qualities....

BOOKING A ROME HOLIDAY

Rooms at the W Rome start from around £500 with breakfast included. To book to go marriott.com.

For Soho House, rooms start from around £160 for members only. To book go to the website, sohohouse.com/house/soho-houserome. You can find out about membership application processes on the website.

For the Hoxton, rooms start from around

£110. To book go to thehoxton.com. The best time to visit Rome is spring, around about now, or in September when the weather is lovely and outdoor drinking and dining is comfortable. In the middle of summer the city can feel overwhelming due to the heat. Sometimes temperatures reach the 30s, which is fine on a beach holiday but a lot for a city break.

Six Senses Rome

Soho House Rome

SPORT

A TITLE IN NUMBERS: MAN CITY IN 2022/23

12

Winning run in Premier League, 24 matches in all competitions

2.44

Points per match, averaging 2.58 goals and conceding less than one per game

6-0

Biggest league win –vs Forest –but beat Leipzig 7-0 in Europe and Burnley 6-0 in the FA Cup

NOW FOR EUROPE

City toast another title but Guardiola admits they need Champions League

FRANK DALLERES

MANCHESTERCity manager Pep

Guardiola admits they must win the Champions League to be considered among the greats despite clinching a fifth Premier League in six years.

City lifted the domestic title in front of their home fans after beating Chelsea 1-0 on Sunday, 24 hours after their successful defence was confirmed by Arsenal’s defeat at Nottingham Forest.

They are the first team since Sir Alex Ferguson’s Manchester United to win three Premier Leagues in a row and

FOOTBALL

can match their neighbours’ 1999 treble next month.

City will have to win a first Champions League final to do so, however, and, despite playing down its significance to his legacy last week, Guardiola conceded it was all-important.

“All Premier Leagues are special. Every time it looks more difficult, but here we are,” said the Spaniard, whose men face Inter Milan in next month’s European showdown.

“If you have to want to be considered a real team you have to win the Champions League, we have to admit it.”

Captain Ilkay Gundogan insists he is

ready to lead City to two more trophies and cap one of the all time great campaigns in English football.

“Two more finals to go. We are looking forward to it. And my arms are ready to lift two more times,” said Gundogan. “The Premier League is the best league in the world and to win it three years in a row is unbelievable.”

Striker Erling Haaland, who broke the Premier League scoring record for a single season, agreed his first year at the club could not have gone much better. “Debut season, 36 goals so far and two more finals left… Not bad,” said Haaland. “I’m so happy. This is a

memory I’ll remember for the rest of my life. We’ve been fighting so hard.”

City playmaker Kevin De Bruyne said retaining their domestic crown had been a psychological as much as physical test.

“As long as you’re not satisfied you keep going. So I want to win more while I still can. It’s two games. Now we need to get ready for the [FA Cup] final against United and the Champions League is after that.”

Guardiola rotated his squad but City needed just 12 minutes to score the game’s only goal against Chelsea, Julian Alvarez rifling low past Kepa.

Number of league goals for Erling Haaland, a new record. Has netted 52 times in all competitions

36

100

Number of goals Manchester City have scored at home this season, 34 more than next best in top five leagues –66 at Bayern Munich

11

Number of titles manager Pep Guardiola has won in his 14 full seasons as a manager

Europe’s top football leagues are awash with asterisks

RELEASE the ticker tape, crank up Blue Moon and fetch Pep Guardiola’s dancing shoes: Manchester City are Premier League champions again for the fifth time in six years and the seventh time in a decade.

With FA Cup and Champions League final appearances to come before the season is out, there is every chance that they win the treble and take their tally of major trophies to 17 since Abu Dhabi bought the club in 2008. But should there be an asterisk next to those achievements?

It’s shortly after that time, according to the Premier League, that City began aiding their collection of world class players and coaches such as Guardiola by systematically inflating their income and misleading top-flight chiefs about it. The club, who have faced sim-

ilar allegations from European governing body Uefa during the same period, have denied any attempt to cheat and described the claims as a deliberate smear. Legal experts have predicted that it could be years before their Premier League case is resolved.

Meanwhile in Spain, Barcelona are celebrating the first significant honours of what they hope will be a new era of glory under one of Guardiola’s disciples, Xavi Hernandez. Last week fans partied late into the night in the Catalan capital after Barca ended a four-year wait for another LaLiga crown. That the club has been forced to deny trying to bribe officials after

being found to have paid a former referee more than £6m, and remains under investigation over the controversy, has not dampened the celebrations.

CLOSE TO THE WIND

Across the Mediterranean in Italy, the most successful Serie A club of the 21st century, Juventus, are in the thick of another scandal. The Bianconeri are expected to find out on Monday whether they will have points deducted for fiddling their accounts, a decision that is likely to determine whether they play in the Champions League next season. The probe has also

cost their former sporting director Fabio Paratici his job at Tottenham Hotspur, while Juve could yet face further sanctions over a separate charge of paying players off the books. And in France, PSG are bound for another Ligue 1 title just months after they settled for a £56m fine, the vast majority of it suspended, from Uefa for breaking financial fair play rules. They have won 20 major trophies in the 12 years since they were acquired by Qatar Sports Investments, during which they have become one of the most high-profile and star-studded clubs in the world but have twice been fined by Uefa for overspending.

It is worth remembering that, of the above allegations, only those against PSG were uncovered by the football authorities. The claims about Manchester City emerged from hacked material dispersed in the Football Leaks files. Key evidence in Juve’s trials came from wire taps and raids ordered by local prosecutors. And Barcelona’s referee row came to light as a result of a tax investigation. Which is to say that, yes, there is an asterisk next to City’s titles until their investigation is resolved. As there are next to some of Barcelona’s, Juve’s and PSG’s, to varying degrees. And these are the few that we know about, mostly by accident, from only the top European leagues. Some of the biggest clubs sail close to the wind and the storm surrounding City is far from an isolated one.

There are questions over Man City’s era of dominance –but they’re far from the only ones, writes Frank Dalleres

YOU’D have been forgiven if, by the 12th minute of Saturday’s Champions Cup final between Leinster and La Rochelle, you’d turned over to Garden Rescue or Midsomer Murders because the match looked all but done and dusted.

A brace from Dan Sheehan and a third try from Jimmy O’Brien gave Irish province Leinster a 17-0 lead in Dublin against the reigning champions.

But in the subsequent 68 minutes the team who were only promoted to the French top flight in 2014 inched their way back into it and, astonishingly, won.

La Rochelle’s 27-26 victory will go down as one of the all time great European finals – up there with Leicester’s win over Stade Francais in 2001 and Leinster’s 2011 triumph over Northampton Saints.

It was Munsterman Ronan O’Gara –now La Rochelle coach – versus his old rivals Leinster, it was in a hostile Dublin cauldron, it was the biggest ever comeback in a European final and, most symbolically, it ended and birthed eras.

Leinster have been a dominant force in Europe for decades, winning four titles – only Toulouse have won more, with five. They breeze through the early stages of both their domestic URC league and the Champions Cup with ease.

But for the second successive year, thanks to La Rochelle, the Irish juggernauts finish their year with nothing.

In a mirror image of last season, Leinster lost their domestic semi-final having rested players to ensure they’re fit for the subsequent European final. And for the second time it hasn’t been enough.

Departing is senior coach Stuart Lancaster – whose career has been resurrected by the Dubliners after a torrid World Cup with England in 2015 – and retiring is captain Johnny Sexton who, although injured, managed to leave his mark on the final with a reportedly cantankerous monologue to referee Jaco Peyper after the final whistle. That opening 12 minutes was perfect from Leinster – about as good rugby as you’d find anywhere – except from the two missed kicks by Sexton’s stand-in Ross Byrne.

And looking at the final score, the Dubliners could have done with their

CHAPEAU TO YOU, LA ROCHELLE

talismanic No10 – those four points could have been the difference.

But La Rochelle came back; through Jonathan Danty, Ulupano Seuteni and Georges-Henri Colombe – who was later stretchered off following a red card hit from Michael Ala’alatoa – to edge one of the great finals.

O’Gara, who has now been part of La Rochelle’s coaching staff for their three consecutive final appearances, said after the game that he felt Saturday’s opponents had almost belittled them pre-match, not giving them the respect they deserved.

And how foolish that was. But former

Leeds must win on final day to offer any hope of survival

MATT HARDY

LEEDS United will need to win on the last day of the Premier League season and hope one of their rivals slip up if they’re to avoid relegation.

Despite taking an early lead, Sam Allardyce’s Leeds fell to a 3-1 defeat at the hands of Europa Conference League finalists West Ham United yesterday in the capital.

Spain international Rodrigo put the visitors ahead at the London Stadium before Declan Rice levelled for the hosts.

Jarrod Bowen and Manuel Lanzini netted in the second half to hand West Ham the victory and 14th place in the Premier League table.

The result left Leeds in 18th position in the table, two points off Everton in 17th and one ahead of Leicester City – who have a game in hand and play tonight against Newcastle United.

Leeds sacked Javi Gracia earlier this month and replaced him with Big Sam for the last four matches of the season. Allardyce’s side host Tottenham next Sunday on the last day of the season while Everton play Bournemouth and West Ham travel to Leicester City.

Elsewhere Brighton all but secured their best ever league finish with a 3-1 win over Southampton. They’re three points off Villa but 16 goals better off.

Ireland international O’Gara has developed a culture whereby his team rise above that and play for one another, as

well as for the port town of La Rochelle, home to just 75,000 year-round residents.

He’s made a French side who were unheralded just a few years ago not only relevant but household rugby names.

He has instilled a pride in the garish yellow and black shirt that wasn’t visible for years.

And what better stage to confirm and solidify your presence as a great club at the beginning of an era than in Dublin, against a team whose traditional home stadium is just miles away, in one of the great finals.

Kudos to O’Gara and kudos to La

Rochelle, they’ve captured the hearts and minds of many. No longer is it David vs Goliath when they’re involved, until another underdog comes to make history against them.

Saturday proved rugby has a future. A future packed with storylines, duels, battles and full stadiums. Long may it continue, despite the issues the sport faces elsewhere.

It was a final for the ages, one that few will forget, especially if you were one of the party of fans who stayed up until 4am to welcome their double European champions home. Chapeau to you.

Murray to skip French Open and target Wimbledon

MATT HARDY

THREE-TIME Grand Slam winner Andy Murray will not compete at this year’s French Open in order to target the Wimbledon Championships.

Despite winning on clay this month in the Challenger event at Aix-enProvence, Murray will not take to the courts of Roland Garros next week.

The Briton joins the likes of Rafael Nadal, Matteo Berrettini and Marin Cilic in missing the calendar’s second Grand Slam.

Murray has featured just once at the Parisian event since 2017 with the 36year-old having gone through a number of lengthy injury episodes.

The Scot is currently 42nd in the

world despite dropping as low as 500th in 2019 and is set to turn his sights on to his home major, which begins in early July. Murray has won at the All England Club on three occasions –twice in Grand Slam tennis and once in the London 2012 Olympics. He has converted three of his nine Grand Slam final appearances into trophies.

Only 32 men will be seeded at Wimbledon so Murray has some work to do before then if he is going to try and get himself an easier draw at SW19 –though some players will not play due to injury. Absence from the French Open allows the Brit access to Challenger events that would otherwise be taking place during the fortnight of Roland Garros.

TENNIS

FOOTBALL

A European final for the ages birthed and ended eras, writes Matt Hardy

O’Gara has made a side who were unheralded not only relevant but household names

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