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Fed sends US rates to 22-year high

JACK

BARNETT

THE US Federal Reserve last night launched what many on Wall Street think will be the final interest rate hike in its current tightening cycle.

Members of the Federal Open Market Committee (FOMC) backed a 25 basis point increase to leave the federal funds rate at a range of 5.25 per cent and 5.5 per cent.

It means the world’s most important interest rate now stands at its steepest level in 22 years. The vote was unanimously in favour of the rise.

Wall Street’s S&P 500 was broadly unchanged on the news, down 0.16 per cent. Treasury yields barely budged. The dollar was flat.

BEWARE OF FALLOUT

NATWEST BOARD IN DANGER ZONE AFTER HANDLING OF CEO OUSTER

CHRIS DORRELL

NATWEST’s board was under fire last night after its disastrous handling of CEO Alison Rose’s exit, agreed at a hastily arranged board meeting in the early hours of yesterday morning.

In a dramatic volte-face, Natwest announced yesterday that Rose would resign just hours after the board had expressed its confidence in her leadership on Tuesday evening. The move came after Rose revealed she had been responsible for unwittingly serving as the source of a BBC story about Nigel Farage’s Coutts bank account, which was shut for political reasons.

The CEO insisted she had not

discussed Farage’s personal financial circumstances specifically, but it is understood that individuals within both 10 Downing Street and the Treasury expressed dismay at the original decision to keep Rose.

Calls were growing yesterday for Sir Howard Davies, the lender’s chairman, to step down ahead of his scheduled departure in spring of next year.

Farage told GB News that Rose’s exit was “a start” but the “whole board needs to go”.

He argued Coutts boss Peter Flavel must take “ultimate

responsibility” while chair Davies is “responsible for overall governance”. Investors also raised question marks over Davies’ judgement. One top-20 investor told the Financial Times “he’s clearly not in charge” while another said “my suspicion is that he will end up going, but probably shouldn't have to”. However, City minister Andrew Griffith said there was no need for Davies, who is stepping down next year, to resign. “There’s already a search under way... for

his replacement,” he said. Griffith separately chaired a meeting of bank bosses who committed to avoid making similar calls to Coutts in future.

Shares in the lender dragged on the FTSE 100, ending 3.7 per cent lower.

With Rose’s exit, the FTSE 100 lost one of its few female chief executives and some highlighted the possible sexism around the saga.

City grandee Ann Francke, who held senior positions at both Proctor & Gamble and Boots and now runs the Chartered Management Institute, suggested women in senior positions might be held to a “higher standard than their male counterparts –most notably when they make a high-profile mistake”.

It also marks a return to tightening after the Fed paused raising borrowing costs at its last meeting in June. Fed chair Jerome Powell (pictured) and co wanted to wait for the effects of its previous rises to filter through the economy to judge whether more increases were necessary.

US inflation has fallen sharply from its peak of just over nine per cent this time last year to three per cent, close to the Fed’s two per cent target.

That has dialled back pressure on the central bank to douse the US economy with aggressive rate rises and opened the door to the Fed to stop bumping up rates.

At last month’s meeting, Powell said the FOMC was minded to tread carefully to avoid piling unnecessary pain on households and businesses.

US rate cuts aren’t expected until at least early next year.

City A.M. muscles up for a new era alongside THG

CITY A.M. is set for a new chapter, under new ownership, after Londonlisted THG agreed to purchase the 18-year-old business newspaper yesterday.

The deal means the newspaper, which has long been a champion of British business, will remain under UK ownership and gives it the support of a partner with long-term aspirations and a strong balance sheet for growth.

City A.M. co-founder Lawson Muncaster said the deal represented a “perfect fit”.

“We both believe firmly in the power of business to make peoples’ lives better and we cannot wait to get started with our new partners,” he said.

THG, which already publishes digital magazines with a combined circulation of 600,000 through The Supplement and The Highlight, has been looking for a

partner in the media space for some time, the firm’s chief exec Matthew Moulding said yesterday. The Manchester-headquartered firm will invest in both editorial and technological resources for the newsroom as well as

Designing hydrogen plants

expanding the paper’s lifestyle and sports categories, with further investment into new areas including sustainability, wellness technology and beauty.

The post-deal business, which has been purchased in a pre-pack

deal from appointed administrators BDO, will also invest in further events, building on existing set-pieces including the City A.M. Awards and THG’s annual Future of Commerce event.

“We’ve long been reviewing opportunities in the disruptive media space but have waited for the right time and the right opportunity to make a digital stepchange in adtech capabilities for Ingenuity,” Moulding said, referring to the firm’s digital brand building and e-commerce platform.

“City A.M. is one of London’s leading media platforms and we will ensure this remains the case with full editorial independence. This deal helps us reach a huge new audience, complements our successful content creation studios and digital media expertise,” Moulding said.

The acquisition will see City A.M.’s 40 editorial and commercial staff join the THG Group.

The deal marks the end of one chapter for City A.M., with cofounder and longtime CEO Jens Torpe retiring from the business with the conclusion of the deal. Torpe said: “During our 18 years we’ve faced a few storms but none as turbulent as the past three years.

“We managed to survive lockdown but unfortunately we didn’t have the money to invest in digital and build on the strong progress we saw during the pandemic.

“I’m therefore delighted that a business like THG has taken over City A.M. Their digital expertise will be a great asset, so after 18 years I take comfort in the knowledge that our ‘little baby’ will grow and become more than a teenager,” he continued.

+bp’s wider transformation is underway. Whilst today we’re mostly in oil & gas, we’ve increased global investment into our lower carbon & other transition businesses from around 3% in 2019 to around 30% last year.

Interest rate hikes boost for Santander but Lloyds remains flat

CHRIS DORRELL AND LUCY KENNINGHAM

SANTANDER UK and Lloyds both posted halfyear results yesterday, showing the impact of rising interest rates on lenders’ profits at a time when banks are under pressure to pass on savings rates to customers.

Whilst Santander UK saw profits boom, Lloyds posted less positive results remaining flat on last year with profits dropping nearly a third from last quarter.

In the second quarter, Lloyds recorded a pretax profit of £1.6bn, flat on last year but lower than company-compiled consensus and 29 per cent lower than the last quarter as an increasingly competitive market ate away at the bank’s net interest margin.

Santander UK saw rosier results. Its profit was up significantly in the first half of the year, with pretax profit up 18 per cent to £1.2bn from £993m last year. This came thanks to a 10 per cent rise in net interest in-

come as the bank reaped the benefits of rising interest rates.

However, the bank also noted that applications for mortgages had been hit by recent economic volatility.

“We know that the ongoing volatility in the mortgage market and continuing inflationary pressures are creating challenges, and we encourage anyone facing difficulties to get in touch as soon as possible,” Mike Regnier, Santander UK’s CEO, said. Lloyds was also hit by mortgage woes as the bank had to set aside more than expected to cope with an expected rise in bad loans.

The results come as politicians and regulators pile pressure onto banks to pass on higher savings rates to customers. Lloyds offers up to 1.8 per cent on their easy access savings account, while Santander UK currently offers 2.5 per cent on its easy access savings account.

City workers pocket above-average pay rise

JACK BARNETT

CITY WORKERS pocketed an average 13 per cent pay increase when switching jobs over the last quarter, a rise above the national average, new research shows.  Salary increases handed down to new starters at the Square Mile’s banks, brokers and

insurers have ebbed over the last year as activity in the financial services sector has slowed.

According to Morgan McKinley, the average new starter gained a peak wage increase of 25 per cent in the second quarter of 2022. Although a sharp reduction annually, starting pay in the financial services industry in the

Producing oil & gas

latest quarter has outstripped the average pay rise across the private sector of 7.7 per cent. Hiring picked up sharply in the first three months of this year “primarily driven by a very strong 2022 for financial services, but also thanks to sufficient gains by the FTSE 100,” said Hakan Enver, MD at Morgan McKinley UK.

Increasing investment in the transition to lower carbon energy and keeping oil and gas flowing where it’s needed. That’s our strategy. Right now, we’re designing two of the UK’s first large-scale low-carbon hydrogen plants, both planned to be built in Teesside. Each project is designed to reduce emissions, and will also help to create and protect jobs in the north of England.

And in the North Sea, we’re currently surveying beneath the seabed to hone in on the remaining oil & gas at one of our existing fields – supporting production at a time of critical demand.

Salary increases for those working in financial services when switching jobs have risen by 13 per cent on average

Banks dish out £7.8bn in dividends as rising interest rates boost profits

CHARLIE CONCHIE

UK BANKS have dished out bumper payouts to investors over the past three months as lenders rake in profits on the back of rising interest rates, according to new research. Banks hiked their dividends to shareholders by 61 per cent to some £7.8bn to investors in the three months to the end of June, despite a wider slowdown in dividend payments to shareholders, according to the latest dividend monitor from

Computershare.

UK dividends fell nine per cent in total on a headline basis to £32.8bn in the second quarter on the back of a slowdown in frothy one-off special dividends.

The bumper period for banks comes as lenders make hay on the back of rate hikes over the past year and charge higher costs to borrowers.

Mark Cleland, chief of issuer services at Computershare, said UK firms collectively had made bumper profits last year, boosting dividends.

City firms told to cut down on corporate jargon

CHARLIE CONCHIE

TOP CITY firms must ditch impenetrable legalese and corporate-speak in their shareholder missives or amateur investors will remain shut out of the market, experts have warned.

Ministers and bosses have waged campaigns to boost engagement from retail shareholders in recent months to get idle cash flowing into the stock market and allow Brits to have a say in the direction of UK corporate growth.

The push has come amid lacklustre engagement with annual general meetings by shareholders. Figures from the UK’s second biggest retail investment platform Interactive Investor, shared with City A.M., found that 93 per cent of votes on the platform were unused this year so far.

Investment figures and communication experts have now warned the status quo will continue unless City firms strip out technical language and speak in plain English to shareholders.

“Having campaigned hard for fuller retail investor participation in our capital markets, we share investors’ frustration around the overly technical and lengthy documents that go with these deals,” James Deal, head of UK at Primarybid –

which allows retail investors to participate in IPOs –told City A.M.

“Prospectuses are a prime example. Often running to hundreds of pages and full of obscure financial terms, as a platform we are required by regulation to stick almost to the letter with them.

“So there must be room for improvement and clarity of message to better engage individual investors.”

Interactive Investor this week kicked off a campaign to get listed British firms to strip out the mumbo jumbo from their corporate communication.

M&S chair Archie Norman has also launched a campaign to try to boost individual shareholders’ sway over the direction of British PLC.

However, City comms aficionados said the moves would falter without more fundamental change in the language of engagement with individual shareholders.

“The investor relations sites of just about all listed corporates remain far too geared towards institutional investors,” Ed Gascoigne-Pees, a consultant at City comms firm Camarco, told City A.M. Firms are “still stuck in technical jargon, especially for the sub-sectors which immerse themselves in acronyms,” he added.

“Banking profits are soaring as they benefit from higher interest rates, and dividends are following suit,” he said.

“Outside the banking sector, companies with pricing power are building margins, contributing to inflation but in turn boosting their dividend fire power.”

HSBC is on track to becoming the UK’s largest dividend payer this year for the first time since 2008 after signalling it has cash to burn on further hikes in payouts and share buybacks this year.

IN BRIEF

DEUTSCHE BANK FLAGS COST CUTS AMID SLUMP IN INVESTMENT BANKING

Deutsche Bank yesterday posted a 27 per cent fall in second-quarter profit as investment banking (IB) revenue slumped and warned of the need for cost cuts even though higher interest rates fuelled gains at its retail division.

The German lender downgraded its outlook for the investment bank, saying it now expected revenues to be slightly lower in 2023, compared to a previous forecast for flat revenue, though it was slightly more optimistic for the broader bank’s fullyear revenue potential.

The figures underscore broader trends in global banking, with investment banks struggling as deals are paused, while higher interest rates prove a boon to other divisions.

DWS IN ADVANCED TALKS WITH SEC TO RESOLVE GREENWASHING ROW

Come back Sid!" the City minister called to a conference earlier this year at the top of EY's offices in Canary Wharf.

The rallying cry –a throwback to the iconic 1980s ‘Tell Sid’ campaign to get Brits snapping up shares in the newly privatised British Gas –points to a trend du jour sweeping the City: boosting amateur investors’ engagement with the market.

The trouble though is that when amateur investors try to get involved, they are immediately tangled in a thicket of corporate legalese and technical waffle that

THE BOTTOM LINE

gives off a very clear message: you don’t belong here.

Annual general meetings should be a day for amateurs to engage the top brass and have their say on the future direction of our big listed companies.

Instead, it’s like firms are deliberately shutting them out.

If ministers want to get more people investing in UK-listed companies , it's time for firms to speak in plain English to shareholders and cut the crap.

DWS, the German fund manager controlled by Deutsche Bank, said it is in advanced resolution discussions with the US SEC to resolve an ESG investigation, that has been hanging over the firm for two years.

The firm booked €21m in provisions regarding regulatory matters during the first half of the year. Since 2021, regulators on both sides of the Atlantic have investigated accusations sparked by a whistleblower that DWS may have misled investors by marketing its funds as greener than they actually were.

Reuters reported this week that the US Securities and Exchange Commission is preparing to resolve a two-year probe into the allegations of greenwashing with a likely financial settlement by the end of September.

Bankenheimer: Number of banks shunning nuclear weapons booms

CHRIS DORRELL

AS CHRISTOPHER NOLAN’s epic hits cinema screens, new research shows banks globally are pulling back from funding nuclear weapons.

According to a new Don’t Bank on the Bomb report, 109 financial firms worldwide have published policies restricting investment in nuclear

weapons producers.

This was roughly 10 per cent more than last year and represents a “steady year-on-year increase” in the number of investors avoiding the industry.

In the UK the Co-operative was the only lender to have explicitly ruled out funding to nuclear weapons producers. Barclays, Natwest and Standard

Chartered were rated in the ‘runnersup’ category, meaning they have taken steps to restrict investment in nuclear weapon producers, but their policy is not all inclusive.

Barclays said it has no appetite to directly finance the manufacture of, or the trade in, nuclear weapons.

Standard Chartered declined to comment. Natwest did not respond.

Interactive Investor have launched a campaign for listed firms to ditch the jargon

More and more banks worldwide are restricting investment in nuclear weapons

Banks have dished out £7.8bn in dividends on the back of interest rate hikes

Ofgem toughens up on rules for energy suppliers

NICHOLAS EARL

OFGEM has announced toughened capital requirements for suppliers, as it looks to shore up the industry’s finances following the volatility of soaring gas prices last year and the domestic energy crisis which caused 30 firms to collapse.

The watchdog yesterday unveiled a new capital target for suppliers of £115 of net assets per customers, with a floor of zero pounds, to ensure suppliers are financially resilient in the face of future market shocks.

The new rules will come in from March 2025 and will mean companies are required to have a level of capital that will make them more resilient to any sudden changes in market conditions, such as the price shock in 2021 which prompted the failure of 30 suppliers, including the de-facto nationali-

sation of Bulb Energy.

This follows Ofgem’s open letter to suppliers on 4 July, where chief executive Jonathan Brearley warned companies against paying dividends above recapitalising.

It also comes after the watchdog’s decision to require suppliers to ringfence both renewables payments and a portion of their customer credit balances.

The strengthening of capital rules is one of a raft of proposals unveiled yesterday, with the regulator also unveiling new plans to boost customer service.

It is calling for earlier interventions to identify and offer support such as temporary repayment holidays for customers struggling with bills.

Ofgem will also ask supplier enquiry lines to stay open longer, including evenings and weekends – and be easier to contact via multiple methods such as email, webchat or other digitalbased platforms.

Ofgem also announced a raft of rules to boost customer service from energy firms

MUCH OF the media attention concerning Ofgem’s raft of reforms yesterday will focus on its plans to crack down on rogue energy brokers ripping off small firms and improving suppliers' customer service. But its most meaningful change are the new capital requirements for energy suppliers.

Ofgem is desperate to avoid a repeat of the energy crisis, when 30 suppliers collapsed and the regulator was accused of being asleep at the wheel. While the news will likely be welcomed by large-scale energy firms, with hefty customer bases and often wellresourced parent companies, it piles

THE BOTTOM LINE

pressure on challenger suppliers.

The change risks consolidating market leaders’ power, with the Big Six energy suppliers now controlling 90 per cent of the market.

The situation will only be exacerbated when Shell finally sells it retail arm.

Ironically, this is the very outcome the government sought to change when liberalising regulations in the industry nearly a decade ago.

Ofgem should be prepared for the rule change to face further scrutiny.

NICHOLAS EARL

PUB GRUB PROVES A HIT FOR MARSTON’S RESULTS

Marston’s yesterday thanked warmer weather in June and appetite for classic pub grub like fish and chips for a surge in like-for-like sales for the 16 weeks ending in July. Group like-for-like sales for the 42week period to July were up 10.7 per cent compared to last year, with drink and food sales performing well, the group said. Chief Andrew Andrea told City A.M. that its food division had performed particularly well after it streamlined its menu 14 months ago to serve “pub classics” such as fish and chips and pies. Shares closed up 1.26 per cent after the update yesterday.

REVOLUTION BARS LAMENTS DECLINING NUMBER OF REVELLERS

Revolution Bars Group yesterday said it expects trading for the rest of the year to be “challenging”, as young clubbers scale back nights out due to the cost of living crisis. In its full year results, the group said like-for-like sales were down 8.7 per cent against pre-Covid levels, as it warned that trading in its late-night bars was “difficult” due to younger guests “struggling financially”. Despite this, revenues for bookings for Christmas parties were up 24.7 per cent compared to the same time last year. Revolution, which owns 68 premium bars and 21 pubs, also noted a reduction in wholesale electricity prices, easing cost pressures. Shares closed down marginally.

Rolls-Royce shares surge as travel and defence spending boost profits

GUY TAYLOR

ROLLS-ROYCE shares skyrocketed more than 20 per cent yesterday after it raised its full-year profit guidance on the back of a boom in long-haul flying and increased defence spending.

The aerospace giant said that half year profits are expected to be “materially above” expectations, with the company looking to make £680m, double the previous forecast of £328m.

Full year underlying operating profits could reach as high as £1.2bn-£1.4bn, up from a previous consensus of £934m, the company said.

The improvement was led by revenue growth across its civil aerospace and defence segments, which are now expected to see operating profits of £400m and £200m respectively in its first half results

REVVING UP Nissan to invest $663m in Renault’s new electric vehicle unit

Aston Martin slings surprise £134m profit

GUY TAYLOR

next week. The firm has benefitted from recovering demand for international travel as well as increased defence spending after Russia’s invasion of Ukraine.

New CEO Tufan Erginbilgic said his “multi-year transformation programme has started well with progress already evident in our strong initial results and increased full year guidance for 2023”.

Taking over from longtime chief Warren East in January, Erginbilgic has aimed to shake up the business following years of underperformance and a disastrous pandemic period, which saw its civil aerospace segment near wiped out as airline fleets were grounded.

Erginbilgic said in May that some of the companies’ key divisions had been “grossly mismanaged”, referring to the business as a “burning platform” which needed to cut debt and improve profits.

Heathrow remains in the red amid price cap row

GUY TAYLOR

HEATHROW AIRPORT yesterday said it remained loss making in the first half of 2023 despite soaring passenger figures, blaming a cap on the amount it can charge airlines for using the hub.

For the six months to June, the west London hub saw adjusted pretax losses halve to £139m but said the airport remained loss making due to the Civil Aviation Authority’s (CAA) price cap.

Heathrow said it did not forecast paying any dividends in 2023 to its consortium of investors, which include the Qatar Investment Authority and Madrid-based construction group Ferrovial.

The airport has been locked in a bitter feud with the CAA and major airlines British Airways and Virgin Atlantic over how much it can charge for landing fees.

The CAA ruled in March that the fees paid by airlines to fly into the airport should drop from £31.57 per passenger to £25.43 from next year.

However, BA, Virgin and Heathrow have appealed against the ruling and are now awaiting a decision from the Competition and Markets Authority.

Speaking to City A.M.

outgoing CEO John Holland-Kaye said that the airport swinging to profit in future would be “completely” dependent on the decision. He insisted that Heathrow has “fantastic relationships” with its airlines but argued it was “in their economic interests to fight over this, of course it is, because every pound they can get off our charges is a pound off of mine”. Despite these gripes, the airport reported a 36 per cent boost in revenues to £1.74bn, though the surge in cashflow is unlikely to offset the hub’s growing £14bn debt pile, which many argue is a more pressing issue for the hub than the price cap.

All eyes on IAG: Investors prepare to see if British Airways owner will soar this summer

GUY TAYLOR

BRITISH AIRWAYS owner IAG will report its half year results this

and Easyjet have, despite being largely positive, slightly tempered expectations.

Conroy Gaynor, aviation analyst at

ASTON MARTIN’s second quarter results raced past market expectations, as the marque benefitted from booming demand for a range of its newly unveiled makes. Revenues rose 23 per cent from £309m to £381.5m in the second quarter, while gross profit was up 29 per cent from £104.1m to £134.4m.

Shares in the luxury carmaker rose to close up 2.88 per cent on the news.

CEO Amedeo Felisa said the company had seen “unprecedented demand” for its new Valour model, with the DB12 launched in May.

Felisa added that the “expansion and transformation” of the marque’s portfolio of vehicles would continue through the second half of the year. The company has seen shares soar in recent months after a slew of major announcements to expand its electric vehicle production.

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NISSAN will invest up to $663m (£513m) in Renault’s new electric vehicle unit, the automakers said yesterday, as they finalised terms of their restructured partnership after months of negotiation clouded by tension.

Heathrow CEO John Holland-Kaye

BOOSTER SHOT GSK raises profit and sales guidance after earnings beat expectations

Just Eat chief financial officer steps down as group returns to profit

LAURA MCGUIRE

JUST EAT TAKEAWAY has said its chief financial officer Brent Wissink will step down next May as the group revealed it made a profit in the first half of the year. Wissink, who joined the firm in 2011, will step down next May at the company’s AGM to pursue other “opportunities”, the firm

GSK YESTERDAY raised its full-year profit and sales guidance after its second-quarter earnings beat expectations, helped by strong sales of its shingles vaccine Shingrix. The upbeat results come a year after the firm spun off its consumer health business, Haleon.

Wandisco: Crisishit firm declares board shake-up

CHARLIE CONCHIE

WANDISCO has announced tech stalwart Stephen Kelly will stay on as its permanent chief yesterday after the firm was readmitted to trading on Tuesday following a fraud scandal.

The firm has been mired in crisis since revealing in April that over $115m (£89m) in sales bookings would be written off its results due to “potentially fraudulent irregularities” on its books.

The firm parachuted in the former boss of FTSE 100 software firm Sage to steady the ship after its shares were suspended. Kelly was tasked with overseeing an emergency capital raise which got the go-ahead from shareholders on Tuesday.

In a statement, Wandisco’s board announced that Kelly would stay on at the helm.

“Following the successful refinancing of Wandisco and the lifting of the share suspension, we are now able to formally shape the Board to support growth and value creation for shareholders,” said Ken

Lever, interim non-executive chairman. Shares in the firm cratered after readmission to the market on Tuesday, plunging more than 96 per cent after the market opened.

The announcement marks the latest turnaround bid launched by the firm after it slashed its headcount by 30 per cent earlier this year and reduced its annual cost base by some $16m.

Yesterday, it emerged that Richards had also channelled money into football club Sheffield Wednesday, which he supports, without the knowledge of Wandisco’s board, as reported by The Times.

The firm paid $362,691 to the club “on behalf” of Eyup Skills, founded by Richards and his wife, Jane, in order for the firm’s logo to appear on the firm’s shirt.

“The board was not informed of these related-party transactions at the time and are unable to provide a comment on the fair and reasonableness of each transaction,” Wandisco said.

IQE to meet £52m revenue targets amid

trying semiconductor market

JESS JONES

GLOBAL semiconductor supplier IQE has performed in line with expectations during the first half of the year.

The Cardiff-headquartered British manufacturer will hit a revenue of “at least” £52m in line with market guidance and management expectations, IQE said yesterday in an unaudited pre-close trading update for the six months ended 30 June 2023.

The AIM-listed company’s shares

notched up 3.5 per cent on the news.

During the first half of 2022, IQE reported revenue of £86.2m.

IQE said they continue to “effectively navigate the challenging macroeconomic environment” by managing costs and implementing their diversification strategy.

It comes amid a rocky patch for the global semiconductor industry which was hit by supply chain issues in the pandemic and has faced a slowdown as demand for smart phones cools.

said yesterday.

The news came as the takeaway delivery service posted adjusted ebitda for the first half of the year of €143m (£122m), against a loss of €134m last year.

Investors welcomed the news, with shares closing up 6.38 per cent.

Just Eat has engaged in a number of cost-saving initiatives to shore up its balance sheet as demand for food

delivery services fell post pandemic.

The firm pinned the results on a “focus on efficiency in delivery operations [and] cost-saving initiatives”.

In Europe, the UK and Ireland, sales revenue increased one per cent in the first half of the year compared to 2022. But across the firm, the number of orders placed declined four per cent.

Stephen Kelly will stay on as permanent chief

Equinor unveils steep drop in profits as fossil fuel prices start to decline

NICHOLAS EARL

EQUINOR’s profits have tumbled in line with falling oil and gas prices, signalling the expected decline in earnings fossil fuel producers across the world will announce this week.

The Norwegian energy giant yesterday posted a 57 per cent yearon-year decline in second quarter

profits, with adjusted earnings of £5.85bn ($7.54bn) over April to June, down from £13.64bn last year.

While expected, profits are also far below the £9.3bn earnings unveiled in the first quarter of 2023.

“Equinor delivered solid earnings in a quarter affected by turnarounds and energy prices down from the extraordinary levels last year,” said Anders Opedal, the firm’s CEO.

He also confirmed the company has maintained plans to distribute £13.2bn to shareholders this year in the form of dividend payments and share buybacks.

Equinor sustained its full-year production growth target of three per cent for the year, fuelled by rising output from the Johan Sverdrup oilfield, Europe’s largest producing site.

Flagging iron ore prices bash Rio Tinto’s profits

NICHOLAS EARL

RIO TINTO yesterday reported its lowest first-half year profits since the pandemic as falling iron ore prices dragged down earnings.

The Anglo-Australian miner reported underlying earnings of £4.42bn ($5.7bn) for the first six months of the year, well below the £6.69bn figure posted 12 months ago.

It has now slashed its dividend to $1.77 per share, a sharp reduction on last year’s offering of $2.67 per share for investors.

Iron ore, which is across the world as a key steel-making ingredient, accounts for roughly 70 per cent of Rio Tinto’s profits.

However, Rio Tinto has suffered from lower commodity prices during the first six months of trading this year amid slowing global demand and a stuttering revival in China’s economy – the company’s key market.

Average realised prices for iron ore from its Australian mine in Pilbata slipped 11.1

per cent in the first half of the year.

The iron ore producer has also raised issues over a shortage of skilled workers and supply-chain problems.

“Our operations and growth projects continue to be impacted by high unplanned absences, tight labour markets, rising input costs and supply chain disruptions,” the company said in a statement.

Rio Tinto had been optimistic that China’s stimulus proposals would boost iron ore demand but this has not been so. The company’s chief executive Jakob Stausholm said the firm was “mindful that we need to raise our game across many of our other operations”.

Rio Tinto has been scrambling to restore its reputation since it destroyed two ancient rock shelters in western Australia, over three years ago.

BAT profits ramped up by 1.5m new customers drawn in by vapes

LAURA MCGUIRE

LUCKY STRIKE maker British American Tobacco (BAT) has seen dramatic revenue growth in its ‘new categories’ division thanks to its acceleration of investment in ever-more popular cigarette alternatives. Its revenue from vaping and tobaccofree products hit £1.6bn in the first half of the year, a 29 per cent increase from the first half of 2022, and BAT said it is making “good progress”

towards its target £5bn of revenue in the next two years.

BAT boss Tadeu Marroco said there was a “renewed sense of energy across the organisation” in the first half of the year.

During the half year the group welcomed 1.5m new customers via sales of tobacco-free goods like vapes – with value share in its e-cigarette brand Vuse up 240 bps, reaching over 38 per cent. However, the group noted a decline in cigarette sales in the US.

The Lucky Strike maker saw revenues jump off the back of e-cigarette and vape sales

Rio Tinto is the world’s largest producer of iron ore, a fabricant of steel

GIVING BANKS THEIR RISK APPETITE BACK

Sable to lend to the real economy. Much of their traditional financing activity has been displaced into the more lightly regulated “shadow banking” sector, particularly that of private equity funds, money market funds, credit funds and hedge funds.

The reason for this shift of business is that banks have become less profitable and nimble. Many banks have a suppressed market equity value because of the lack of transparency over the risks which they run, and concerns over those risks, particularly on matters of liquidity. Investors are cautious over whether banks will always have enough cash to meet their outgoing liabilities as they arise. Regulators in turn apply higher standards to manage risk they often cannot see.

Top-up charges and capital requirements are, however, blunt instruments, which might be (simultaneously) either too high or too low since they have been calibrated on the basis of an inadequate understanding of bank risk at a granular level. They are based on numbers which are considered (for the most part) in the aggregate.

The issue for the banks is one of trust, which flows through to value. A mistrust of bank data is connected to shareholder concerns over banks’ volatile business flows and the risks arising from the fact that banks’ fundamental business model involves bor-

longer-term basis, i.e. so-called maturity transformation –an activity which is inherently unstable and makes banks susceptible to a "run". With online banking, the impact of recent runs on banks has been more dramatic and rapid than ever before. To balance that risk, regulators apply ever more punishing regulatory requirements, forcing banks to raise capital –and at a higher rate than their ‘shadow’ bank equivalents.

Technological advances, aligned with sophisticated legal reasoning, now make it feasible for banks to operate in a more cost-effective manner by undertaking a nuanced and granular analysis of their risk-adjusted cash flow or cash flow at risk (‘CFaR’). Done properly, this will provide banks with a more accurate understanding of their risk position, which can be shared with investors and regulators. The result is that banks will themselves gain a better understanding of the risks they are truly taking. This should allow, over time, for an increase in their share value and a reduction in risk capital charges, since investors and regulators will become focused on the manage-

ment of actual not perceived risk. Steps must be taken to address the current situation. Banks need to gather information on their cash inflow and outflow exposures. This will require an assessment of their CFaR, by analysing the risks and implications of each individual cash flow and then at that point aggregating the risk. This is in contrast to the current approach taken by many institutions which add and subtract aggregated risk metrics that may or may not be mathematically consistent and are likely to be insufficiently granular. The task involves the collection of data from core bank systems and the application of big data techniques. This data will need to be enriched by tagging each item with its original legal and other characteristics, allowing for a more accurate picture of the overall cash flow exposures.

Some banks already do this, albeit in

uct areas, legal entities or business lines, which means that they miss the understanding that comes from appreciating the risk arising from cash flows across the whole bank group, regardless of how they arise.

For optimum results, matters could be taken one step further by introducing ways to track transactions across a financial group in real time through the use of blockchain or other technology. This would enable the creation of a “digital balance sheet” which can then be shared with the regulators, allowing for informed “live” discussion on specific elements of risk.

Banks should consider how the risks resulting from their cash flows can best be managed, from legal and other offsets to hedging strategies, freeing them up to play a bigger role in the financial markets.

More granular data would allow banks to be nimbler in managing their own risk and exposures, as well as being able to reprice client or counterparty trades in a more responsive way.

Finally, banks need to be more transparent with shareholders and regula-

legal and regulatory points can demonstrate why existing perceptions should be reconsidered on the basis of the new data and analysis. For bank regulators, the new data should be significantly more useful than traditional sources of information, such as regular, but afterthe-fact, reports.

Banks will soon face ever-increasing capital requirements and liquidity buffers, as is anticipated in a recent report of the Swiss National Bank over the collapse of Credit Suisse, unless they find new ways to manage their risk.

There is now an opportunity for the banks to retake their essential place at the centre of the financial system, benefitting not just their shareholders, creditors and management, but the regulators themselves, as the custodians of the safety and soundness of the system as a whole. The benefits this will bring to banks and to wider society are self-evident.

£ Barnabas Reynolds is a partner at Shearman & Sterling and the author of A New Direction of Travel for Financial Regulation –A Time for Fresh Thinking, published by the Digital Economy Initiative. Michael Adams is a consultant and former senior banker who led a team which successfully implemented the cash flow at risk approach at a major financial institution. Simon Dodds is of counsel at Shearman & Sterling and was formerly the co-general counsel and head of compliance at Deutsche Bank AG.

In this guest essay, three senior City figures –Barney Reynolds, Michael Adams and Simon Dodds –argue banks and regulators need to change the way they measure their cash flow –allowing lenders to retake their role at the heart of UK finance

Barney Reynolds, Michael Adams and Simon Dodds outline a brighter future for banks

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MARK KLEINMAN

BREAKING BUSINESS STORIES AND ANALYSIS

What next for Natwest? Somebody with a tighter grip at the top, and that’s just the start

BANKING with the human touch: that’s how Coutts, the high net worth bank owned by Natwest Group, likes to position itself. Like so many corporate slogans, however, it often bears little resemblance to reality.

The hole that Natwest, still 39 per centowned by British taxpayers, has dug itself into over the closure of Nigel Farage’s Coutts accounts is entirely self-inflicted and utterly unforgiveable.

Once it became clear that Rishi Sunak and Jeremy Hunt had lost confidence in her leadership, Dame Alison Rose’s fate was sealed. But how could it have been otherwise? Set all the weaselly-worded excuses to one side and it boils down to this: the CEO of a bank divulged confidential, and erroneous, information about a client to a journalist to serve her own purposes.

Nobody emerges from this sorry affair with any credit (although I’ll leave it to others to dissect the BBC’s failings in it), other than –dare I say it – Farage himself. Nevertheless, the former UKIP leader’s demand yesterday that the rest of the Natwest board should follow Rose out of the door was crass. Bank boards cannot resign en masse, as Farage well knows.

In any case, Sir Howard Davies, the chairman, was already due to step down, with a search underway. Unfortunately for

Farage, Rose’s defenestration is likely to prolong, rather than shorten, the chairman’s tenure.

But Davies will know that he is now no more than a lame duck chairman who does not command the respect of his biggest and most important shareholder. He can only hope that the selldown of the government’s stake proceeds as quickly as possible.

The affair raises other troubling questions about the bank’s culture and processes, but also the autocratic behaviour of its now-departed chief executive.

Rose’s collection of external roles – there were seven listed on the Natwest website at the point of her departure –was excessive and speaks to a lack of control. City investors to whom I have spoken say she sought to exert a level of control that was faintly reminiscent of the most famous RBS CEO of all: Fred Goodwin.

Then there were the regularly-surfacing rumours of tensions between Rose and Davies during the four years she was in charge.

The government remains a passive shareholder in Natwest. But after this fiasco, it’s obvious that Natwest –and therefore taxpayers – would benefit from a chairman who has a tighter grip and a chief executive more singularly focused on their day job.

Irish eyes are smiling after Ovo deal

STEPHEN Fitzpatrick has had a tidy week. Ovo Energy’s founder landed a big windfall –the company refuses to say how big –from the sale of a chunk of his stake to other investors.

The company says the transaction was valued at £200m, although it is curiously reticent about the overall valuation implied by the deal.

In any case, Fitzpatrick must

ANNOUNCEMENTS

LEGAL AND PUBLIC NOTICES

have taken tens of millions of pounds off the table, while Mayfair Equity Partners and Morgan Stanley Investment Management have absorbed some of the Irishman’s shares.

I can also disclose that Ovo is now close to recruiting a separate chair for Kaluza, its intelligent energy platform. Ovo denies it’s the prelude to a break-up of the group, but I’m not so sure.

SPORT Team GB predicted lowest medal tally in 20 years at Paris 2024 Olympics

SPORT PAGES 25-27

FIRST blood to Peter Hargreaves?

That’s the logical conclusion to draw from the bizarrely worded confirmation from the funds supermarket Hargreaves Lansdown that it has begun a search for Deanna Oppenheimer’s successor as chairman.

In a stock exchange announcement confirming my report on Sky News, the company said it had “commenced an exercise to determine the attributes of any successor chair candidates. No decisions have been taken at this time.”

Surely the directors of a FTSE 100 company are aware of the “attributes” its chair requires?

Mangled language like that either implies a board determined not to appear as if it’s caving in to its activist founder, or one which is genuinely confused.

Given Hargreaves’s previous outbursts, labelling Oppenheimer’s tenure “a disaster”, I suspect it’s the former.

The latest downgrade, from analysts at Deutsche Bank, called a recent, modest rally in the stock an “overreaction” to a trading update this month.

Hargreaves has yet to propose –at least publicly –an alternative plan for the company. Much of his irritation appears to stem from the company’s

inflated cost base.

Some senior executives are said to have worked almost entirely remotely since the pandemic, while one person close to the co-founder said others had incurred huge taxi bills commuting from distant homes.

The arrival of Dan Olley –already on the board as a non-executive director –buys the company some time. Olley, who has had to be patient while extricating himself from Tesco, is likely to face pressure from

Hargreaves to refocus the business on drawing higher-margin –rather than greater volumes of –clients. Nevertheless, people close to the co-founder say he is supportive of the appointment and aligned with his objective to secure higherwealth clients.

With the disclosure this week that Robinhood Markets has recruited a new boss to spearhead its UK launch, Olley doesn’t have a moment to lose.

MARK KLEINMAN IS SKY NEWS’ CITY EDITOR AND A FORTNIGHTLY CITY A.M. COLUMNIST@MARKKLEINMANSKY

Olley’s Hargreaves Lansdown arrival could signal a winning hand for restive founder

WHEN FINTECH founder Christian Faes messaged with the news he was heading permanently to sunny California in June, he was keen to stress a particular point.

“It's not 'another founder leaving London' story,” he said. “I'm still bullish on UK fintech, but have moved to the US for this next chapter.”

This week, however, over a video call from his office looking out over the misty Santa Monica coast, he is in a slightly less conciliatory mood with the country he called home for a decade and a half.

“I guess part of my thinking of moving to the US was I did feel like it was particularly difficult building a business in the UK,” he tells City A.M.

“In many respects, it goes back to the Brexit vote and even a year or two before that and all the distraction around it. Every meeting you would go into, there’d be kind of a mandatory 15 minutes where everyone would sort of vent about Brexit. I just think it was such a distraction.”

He’s “definitely not down on London”, he says, it’s “still a brilliant city”. But across the Atlantic and with the self-confessed “starry-eyed” perspective of a recent move to the Sunshine State, Faes - the founder of one of London’s few listed fintech firms Lendinvest –has done some thinking.

LONDON DECLINE?

Much ink has been spilt and many conference minutes eaten up in the defence and attack of London’s standing as a fintech hub over the past few months.

Just as when Monzo founder Tom Blomfield announced a few weeks prior that he was heading to San Francisco, Faes’s announcement was inevitably picked up as a symptom of decline.

WHY I LEFT LONDON FOR CALIFORNIA

Faes was among the early crop of postfinancial crisis fintech founders that rode a wave of good vibes and political support in the early 2010s as London became a pre-eminent fintech centre.

At London Tech Week in early June, Rishi Sunak and Jeremy Hunt launched something like a counteroffensive against the prevailing narrative on the UK, welcoming with open arms scores of Silicon Valley tech bros and cashed-up Asian investors in a flashy charm offensive.

Where Faes’s perspective on the debate is unique is his lack of any jingoistic fervour. He grew up Down Under and still speaks with a strong Aussie accent, first training as a lawyer and doing his first stint in the UK as a corporate lawyer with Clifford Chance.

After returning to Australia, London then drew him back as a promised land of entrepreneurship. He co-founded property mortgage firm Lendinvest, then Montello, in 2008 and steered the business through the fallout of the financial crisis.

“As an Australian looking at [London], that was the best place to be, you know. As a young kid aspiring to build a great business, it's London or New York really,” he says. “I kind of felt like London or New York were equal choices.”

Fast action from the Financial Conduct Authority and vocal backing from the government catapulted the UK to the front of the pack on fintech globally. “Effective tax incentives and numerous government programmes designed to promote competition and innovation” were cited as the reasons for the UK’s world-leading status in a 2016 report from EY.

But even as fintech starts to take a more central place in the political debate again, Faes is not convinced.

“You had the prime minister and the chancellor –David Cameron and George Osborne –they were real advocates for the fintech sector. Not that dissimilar to now with Rishi Sunak. But it feels like it's more lip service now than reality,” he adds.

Some of the recent efforts to champion the sector have missed the mark in his view. The attempt to label the UK “Unicorn Kingdom” and a focus on valuations in general are a particular target of his annoyance.

“F***ing nonsense, you're building a business not a get rich quick scheme,” he says.

“I can only assume government go to that rhetoric because they think it

catches people's attention and is a metric they can understand. But it's so simplistic and wrong, actually,” he adds.

MOOD MUSIC

While Faes’s Lendinvest was a beneficiary of the good mood music in the 2010s, that shifted somewhat as it began to plot its move onto the public markets in 2020.

At the heart of the UK’s current efforts to reinvigorate its global standing has been reforming the public markets to welcome growth technology firms. LendInvest in that regard might be seen as the ideal candidate.

Faes moved from chief executive to his current position of executive chairman 2020 and oversaw the IPO process

and was part of the roadshow team that looked to win round backers for an IPO. He says the step change from pitching venture capital (VC) investors to winning public markets backers in London was a sharp change.

“When you talk to VC investors generally they're more likely to be thinking blue skies and in a more ambitious way,” he says. “When you go to IPO, you then find yourself in front of balding, grey haired, sort of elderly men predominantly, that just aren't really that interested in technology.

“That is the reality.

“And not only ‘not interested in’, there kind of seems to be this deep scepticism around technology.”

There lies the problem in London’s efforts to boost itself as a listing centre, he argues. The new tweaks rolled out by government and regulators to zhuzh up its appeal should be applauded and are “good initiatives” but the more tricky fix of staid “investor mindsets” remains.

He says Lendinvest has felt the sharp end of that. Even as its assets under management have ballooned to £2.6bn and the firm has posted steady profits, its share price has cratered over 75 per cent since IPO to trade with a market cap of around £67m.

“There's a lot of frustrations around that, but it is what it is,” he says. “It's a good business. I think we just keep

trucking on eventually, you know, people will realise the value of what we've built.”

SUNNY OUTLOOK

But now as he finds himself in sunnier climes –perhaps because of that –Faes is still, if not bullish, then hopeful on the outlook for UK and London fintech.

“It's always darkest before dawn, isn't it? [...] I think it's easy to be quite down on the prospects for the country now, but I don't think it's structural decline. Hopefully not. I think it's just been a tough period.”

He still takes a lift from a Londoncentric Fintech Founders group that has some 300 members all weighing in and supporting each other. The earlystage investor base in the UK is strong too, he adds.

For now though he’s got things to be cracking on with stateside. Faes has just launched the first venture out of his new fintech investment firm in the US, Faes & Co.

“Life is good” he says, the office is both near home and the beach. As we speak, the dawn fog is clearing over the Santa Monica coast.

“In the summer I get this sea mist come across in the morning,” he says. “It feels like London in the morning. But other than that, it's been really good.”

Valuation concerns are f***ing nonsense. You’re building a business, not a get rich quick scheme

Growing up, London and New York felt like equal places to be to build something

Charlie Conchie interviews the biggest movers and shakers in tech, fintech and financial services

Lendinvest founder Christian Faes is enjoying better weather on the west coast, so why is he still so hopeful for the future of UK fintech?

THE SQUARE MILE AND ME

WHAT WAS YOUR FIRST JOB?

Working in a kennels – it was great fun feeding the dogs, but less fun cleaning up after them.

WHAT WAS YOUR FIRST JOB IN FINANCIAL SERVICES OR BUSINESS?

I was a financial accountant at Hamilton Lunn Ltd, a hedge fund and private equity boutique. The job involved providing the accounting for both the hedge funds and private equity areas of the business, including series accounting for the fund –which really gives you a headache when performed manually.

WHEN DID YOU FIRST KNOW YOU WERE IN THE RIGHT JOB?

The day no one questioned my figures!

WHO IS THE BUSINESS CITY OF LONDON FIGURE YOU MOST ADMIRE?

Sir Nigel Wilson, head of Legal & General, who has been prominent in the development of savings and retirement provision in the UK and the profitable, responsible investment of capital to address structural challenges in the UK, for example by the redevelopment of decaying areas and construction of affordable housing.

WHAT’S ONE THING YOU LOVE ABOUT THE CITY OF LONDON...

The cosmopolitan and inclusive nature of the City – over 500,000 people from all sorts of different backgrounds cram into just over one square mile and get on with productive lives each day – it’s amazing, frankly, and you rarely see any trouble.

...AND ONE THING YOU WOULD CHANGE?

I would like to foster better international relations post-Brexit to drive inward investment and positive development of the built environment. No one benefits from empty, second-rate office space and so this needs to be repurposed, to meet the City’s needs in an economically & environmentally-sustainable way.

WHAT’S BEEN YOUR PROUDEST ACHIEVEMENT?

Sponsoring and then waving off a terminally ill child on a family holiday to go to Disneyland Paris –with full medical support and even police outriders in a City of London black cab from Canary Wharf. They really deserved a family holiday and a break from the gruelling roundthe-clock care required –and The Magical Taxi Tour, which is organised by the Worshipful Company of Hackney Carriage Drivers, one of the 111 livery companies of the City of London, provided that for them.

WHAT HAS BEEN YOUR MOST MEMORABLE LUNCH?

Shuffling into the loos in a smart restaurant to get a former minister of the environment from an eastern European country into a jacket and tie, so that we could have lunch there together, in accordance with their dress code.

WE’RE GOING FOR LUNCH AND YOU’RE PICKING –WHERE ARE WE GOING?

The most special places are always the most hidden – there are 54 livery halls (including associated venues) in London and some of them are open for lunch.

However, some, like Butcher’s Hall, don’t even disclose who they are at their address, at 87 St Bartholomew Close, but they provide roast beef to die for.

QUICKFIRE ROUND

FAVOURITE...

FILM: JOHNNY ENGLISH STRIKES AGAIN

BOOK: A NECESSARY EVIL BY ABIR MUKHERJEE

ARTIST: THE WURZELS

DRINK: TEA OR COFFEE? MOST DEFINITELY BUILDER’S TEA

AND DO YOU HAVE A FAVOURITE POST-WORK WATERING HOLE?

The Lamb Tavern in Leadenhall Market – down to earth and hearty.

ARE YOU OPTIMISTIC FOR THE REST OF 2023?

No agent is ever successful if they’re pessimistic; that said I think there are some very real headwinds out there and a great deal of financial pressure on people’s personal finances – these issues need carefully navigating to turn 2023 into a good year.

GIVE US ONE BOLD PREDICTION FOR THE CITY THIS YEAR?

The next Bank of England governor will be a woman. That said we may have to wait until 2028…

AND WHERE WOULD WE FIND YOU ON A SATURDAY AFTERNOON?

Cheering (or more likely trying to stay awake and clapping politely) as my two boys play in a cricket match. YOU’VE A WELL-DESERVED TWO WEEKS OFF –WHERE ARE YOU GOING, AND WHO WITH?

As a family we are planning to cycle around Lake Constance, through Switzerland, Germany and Austria. And the boys have insisted though that I don’t get to ride an ebike, which I was rather counting on for the hilly bits... which I fear there are lots of.

We dig into the memory bank of the City’s great and good: this week, Marcus Fincham, prospective City Alderman, reveals his top spots, favourite memories and career highlights

CITY DASHBOARD

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SWINGS AND ROUNDABOUTS

FTSE 100: Soft Lloyds Bank results spark sell off as Natwest tumbles

LONDON’s FTSE 100 was dragged down yesterday by investors ditching shares in Britain’s biggest banks after Lloyds posted a soggy set of results that dampened market sentiment.

The capital’s premier index fell 0.19 per cent to 7,676.88 points, while the domestically-focused mid-cap FTSE 250 index, which is more aligned with the health of the UK economy, climbed 0.19 per cent to 19,186.54 points.

A poor set of second quarter earnings out yesterday morning from Lloyds Bank, the UK’s largest mortgage lender, forced the bank’s share price down 1.66 per cent and to close to the bottom of the FTSE 100.

Lloyds sounded the alarm on the UK economy in fresh forecasts, compelling the lender, which also owns Halifax, to set aside £419m in provisions to

cope with an expected uptick in customer defaults.

Traders have been gearing up for the UK’s big banks to post tens of billions of pounds in profits during second quarter earnings season. The sector has been boosted by the Bank of England hiking interest rates.

However, Lloyds’s profit miss suggests the big players’ results could be dogged by higher loan-loss provisions.

Natwest tumbled over 3.74 per cent to finish bottom of the FTSE 100 after boss Alison Rose was forced to step down. HSBC was slightly lower. Barclays reversed losses to finish in the black.

Aerospace giant Rolls Royce rocketed to second of the FTSE 100, advancing more than 20 per cent after it bumped up its profit forecasts. Ocado topped the index, taking its year to date gains to nearly 60 per cent.

Jersey-headquartered miner Centamin impressed investors yesterday with a glittering set of half-year results, as higher-than-expected gold production off the back of investment in the Sukari gold mine in Egypt brought revenues up to $426m, an 11 per cent jump year-on-year. “As expected, 2023 is the year investments in Sukari start to bear fruit,” analysts at Peel Hunt said. They rate it a ‘buy’.

Despite a mixed-bag set of results from Revolution Bars yesterday, in which the group warned about declining sales as revellers rein in spending, Peel Hunt analysts rate it a ‘buy’. “There is the potential for a big profit recovery for this high quality business as the inflation rate slows and consumer confidence rebuilds,” the analysts said.

“After six sessions of gains for the FTSE 100, the UK blue chip index spent yesterday hovering below the flatline, swinging between gains and losses amid a mixed session for European markets. Stateside, earnings season is in full swing with mixed results from the tech sector.”

VICTORIA SCHOLAR, INTERACTIVE INVESTOR

Powerful real-time thought leadership, insights and news delivery mechanism fuelling the most up-to date reporting, adding critical context for decisions that require consciousness, education and thought leadership.

ONE

OPINION

EDITED BY SASCHA O’SULLIVAN

From creche to healthcare, companies have renewed a social contract to staff

Eliza Filby

IT IS a familiar scramble; on the stroke of 8am you dial the number of your local GP surgery only to find that you’re 18th in the queue.

There’s now no way you’ll be in the office for that 10am meeting, so it looks like it’s another WFH day. But could this rigmarole soon become a thing of the past?

Well, that may depend on where you work and, ultimately, how far the government is prepared to go with its latest consultation on the role employers have in looking after the health of their workforce. Health benefits at work are nothing new; most major employers offer some form of support such as private health insurance, as do the main trade unions.

There has of course been a growing emphasis on mental health and wellbeing in the workplace. Now the government is considering tax incentives to encourage employers to go further in the field of occupational health. The government's incentive here is pretty obvious; supporting the unwell back into work, relieving the NHS and, crucially, keeping older people in the workforce.

And there's no doubt that this is an urgent issue. A new report by the Health Foundation forecasts that nine million people will be living with a

chronic or major illness by 2040. The report’s authors call for urgent action to improve the health of the nation which, left unchecked, will place an intolerable burden on health and social care services. So could businesses do more?

Not long ago occupational health meant getting a leaflet about how to sit in a chair and how to position your monitor. Things have come a long way since then, not least post-pandemic when employee wellbeing and health shot up to the top of corporate risk registers. Offering private health insurance is fairly standard in lots of companies, and many now offer access

to private GPs, too. Could we see this trend expanding, including among SMEs who represent the vast majority

of UK employers, and who tend not to have the resources to deliver such benefits? Perhaps new office buildings in the future could feature on-site healthcare provision, paid for via charges levied on the building’s occupants? It may get people in the building more often.

But there’s a more compelling reason for employers to consider their responsibilities. The pandemic triggered a reassessment of employers' responsibilities to their employees to such an extent that the conversation around flexible working is extending well beyond the question of where you work. In fact, a truly hybrid approach

Let’s be honest, banks like Coutts should be able to get rid of customers they don’t like

NATWEST’S handling of the Farage affair has been an unmitigated public relations disaster. They have turned a much-disliked public figure –a former UKIP leader – into a sympathetic victim of procedural mistreatment, false accusations, and severe privacy breaches.

The resulting furore has led to a public apology and top-level defenestration. Alison Rose was ousted as CEO on Tuesday evening after admitting to disclosing information about Farage to a BBC journalist. This included the incorrect claim that Farage's Coutts account was only shut down for commercial reasons. Ironically, this all began with Coutts’ ‘Wealth Reputational Risk Committee’. Their assessment concluded that not only was Farage becoming commercially unviable but also that offering him services was inconsistent with being an “inclusive organisation”.

This attitude shows how a certain ideology has seeped into major institutions. It’s not only that the Bank’s reputational risk committee failed to

Matthew Lesh

see the obvious reputational risk of debanking someone with such a large megaphone. But also, that they did not consider this a political decision. Of course, nothing could be more political than deciding someone’s views aren’t “inclusive” enough to offer them a service.

In response to this saga, some Conservatives, including within government, are considering new rules to prevent banks from discriminating on political grounds. Using state power to push back against the cultural turn to the left is tempting for the Tories. Moreover, Natwest are still 40 per cent taxpayer-owned, have a privileged licence to operate and an implicit

bailout guarantee.

But is it wise to use state power to dictate that a private entity must do business with someone? Should a government that has talked about simplifying banking regulation to make the UK more attractive for investment place even more burdens on the sector?

The government risks undermining a vital principle of a free society: private banks like Coutts, like any other business, should be perfectly entitled to choose who they provide services to. Ultimately, the alternative is a form of enslavement in which individuals are forced to work for others without any choice.

That’s not to say we shouldn’t criticise the decision and its handling. Indeed, that’s the appropriate way to respond to these situations. But ultimately, Coutts has always been an exclusive private bank; most people would never be able to get an account, let alone have theirs removed.

The government has a significant role in addressing the root causes of the increasingly precautionary approach

to work involves considering how our professional life can support aspects of our personal life. This is why major companies are increasingly offering aid at different life-stages, from fertility help to menopausal guidance, from on-site creches to eldercare support. In an age of increased professional mobility it is a way to keep your workers loyal and, in the age of multigenerational care responsibilities and the dual income juggle, it is a way to keep your workers sane.

Sceptics may view state-supported workplace healthcare as undermining the NHS, but for business it is a further opportunity to rewrite the social contract between employer and employee in an age when retaining talent is an absolute priority.

Employers should certainly think creatively about the support they offer to staff, and the government is right to recognise this in the tax system. But here comes the caveat; if taxpayers’ money is deployed in support of more healthcare provision in the office, what happens to the self-employed, delivery drivers, farmers and contract workers? The government cannot risk exacerbating a division that already exists, whereby access to good healthcare is dependent on having a good job.

This is especially true if taxpayers’ money is only benefitting the well-employed. Employers should rightly expand their supportive benefits to their workers whether through childcare, eldercare or healthcare, but it can only be part of the solution to improving the nation’s health.

£ Eliza Filby is a generations expert and a regular columnist at City A.M.

UP IN FLAMES

taken by banks concerning risky individuals, which has resulted in thousands of people losing their accounts. There are the complex (Europen Unionimposed) compliance requirements for “politically exposed persons”, cumbersome anti-money laundering rules and the emergence of the FCA’s environmental, social and governance push.

These best-intentioned regulations encourage banks to take an excessively risk-averse approach, ultimately leading to the debanking of people like Farage. Suppose someone carries some potential risk that could entail the slightest possibility of an investigation or a multi-million pound fine from a regulator. In that case, it makes sense to shut down their account. Put simply, no regulatory compliance officer has lost their job for saying ‘no’.

Before the government adds even more requirements to banking licences, they should address their role in causing this mess in the first place.

£ Matthew Lesh is

the director of public policy and communications at the IEA

James Cleverly, the Foreign Secretary, is under pressure to update travel guidance after families with holidays booked to Rhodes were told by their tour operators they could continue to fly. The current advice means people will be unable to secure a refund if they decide not to travel to the island.

Major companies are increasingly offering their staff aid at different life stages

Many companies already offer private health insurance

WE WANT TO HEAR YOUR VIEWS

LETTERS TO THE EDITOR

AI on the case to protect data

[Re: Re: IBM Security Report: UK businesses face £3.4m data breach costs but AI could help, July 24]

After a tough year of breaches impacting some of the largest UK businesses, the subject of cybersecurity has cemented itself within boardroom budget conversations.

Global interest in AI has coincided with this, with wider attention now turning to its cybersecurity applications. However, the sector invested in significant innovation long before people outside of cybersecurity caught onto the hype.

Reducing the breach lifecycle is key to minimising the damage of an attack, and hardware AI provides a compelling solution to keep data safe by reducing the threat variables at the external layer and removing the human from the picture.

Unlike the vast external environment, when the physical layer is bolstered with AI’s autonomous self-learning capabilities, it is able to more accurately and quickly detect when there are access attempts from rogue sources – likely during an attack.

Those working within cybersecurity have been arguing for AI’s increasing inclusion for a while, and convincing decision-makers becomes easier when risks are no longer a hypothetical, but a real business threat.

Camellia Cha

CROWNING MESS Beeb breached advertising rules for coronation tickets

Bank of England monetary bosses should have their pay tied to inflation targets

David Bholat

IN APRIL, the Bank of England’s Chief Economist and member of the Monetary Policy Committee (MPC) Huw Pill provoked the ire of workers when he said they would need to accept reductions in real income. More recently, Andrew Bailey has doubled down by telling workers to moderate demands for higher wages. These comments by policymakers about other people’s pay inevitably raise questions about their own. According to the Bank of England’s Annual Report published earlier this month, Bailey turned down a pay rise, while other members of the MPC received a small one, despite inflation running well above the Committee’s 2 per cent target.

EXPLAINER-IN-BRIEF: ANOTHER ROUND OF HEAT PUMPS VS GAS BOILERS

Since the energy crisis kicked in, there has been a fresh row over the cost of making homes in Britain more energy efficient.

Yesterday, the government added to the fight by suggesting the timeline for landlords to make their rental properties more energy efficient would be pushed back from its target of 2025.

It comes amidst a growing softening of green policies within government. But the Tories faced a backlash from their own ranks, with former Cop26 President Alok Sharma and

Simon Clarke, the former Housing Secretary, both coming out to implore the government not to roll back green policies.

According to energy supplier EDF, more than half of homeowners are considering swapping a gas boiler with a heat pump in order to save cash in the long term.

But if landlords are incentivised to also do so, we could wind up in a position where it is energy efficiency only for the home owners. Currently, less than half of rental properties have energy rating of A to C.

If monetary policymakers are to credibly urge wage restraint, their own incomes should be more firmly anchored to policy outcomes. A straightforward way of doing so is to tie the pay of MPC members to the inflation target. If they achieve it, MPC members would receive a 2 per cent nominal pay rise. Otherwise, their pay would get reduced by deviations from target. For example, if inflation averaged 10 per cent, then 8 per cent of MPC members’ salary over the past 12 months would be clawed back. Deflation would result in proportionate pay reductions. A more refined remuneration formula might also grant a small margin for error of less than 1 per cent around the target, and account for time lags in the transmission of monetary policy.

Nominal adjustments to MPC members’ salaries would amplify the real effects of price level changes felt by everyone. This fairly reflects the greater influence members of the committee have on inflationary outcomes. It also compensates for the fact that policymakers are practically immune from punitive actions like dismissal or personal civil liability that otherwise hang like Damocles’ sword over the heads of directors in other organisations.

Beyond the MPC, the Bank of England could consider adopting remuneration policies for its employees that mirror those it requires of regulated firms. For starters, the Bank would identify its Material Risk Takers ‐ staff who significantly influence its operations and policymaking. Then, in ac-

cordance with PRA rules around remuneration, a greater proportion of their total compensation would be deferred. For example, the head of a team supervising a systemically important financial institution might have their annual bonuses deferred for three years and forfeited if the institution fails or receives exceptional support during this period. To compensate senior central bankers for greater downside risks, the level of their potential pay likely needs uplifting to allow the central bank to attract and retain the talent required for effective supervision and policymaking.

In the private sector, variable and deferred remuneration policies exist to prevent excessive risk-taking by executives for quick personal gain by timing and tying their payouts to longer-term horizons. The rationale for these policies in central banks is different. Central bankers already make policy in an impartial way, even if, like any of us, they do so from partial perspectives. So, we cannot expect policymaking to improve simply because central bankers might lose some pay.

Instead, the rationale for these policies is to ensure central bankers retain their authority to weigh in on issues within their remit. Bailey and Pill are right to warn about a wage-price spiral, alongside other inflationary factors like supply shocks and profiteering. But the moral force of their message would be stronger if the Bank of England led by example. It can do so by more clearly linking the pay of its senior officials to their performance against policy objectives. This would provide a more material mechanism for ensuring central bank accountability than current, largely tokenistic gestures like open letters between the Governor and the Chancellor.

Performance-based pay for policymakers will be branded as “virtue signalling”, but is that really such a vice at a time when many feel the bond between earnings and outcomes is broken, and that those with power are held to different standards than those without.

£ David Bholat is a former senior manager at the Bank of England

The Bank of England’s Andrew Bailey turned down a pay rise

The BBC has been told it breached two counts of the advertising code after it falsely gave people the impression they had secured a ticket to see the coronation concert, featuring Katy Perry, on May 7 this year.

NEW MOVIES

EDITED BY STEVE DINNEEN @steve_dinneen

THE NEXT SMASH ELEVATED HORROR

deadly is unleashed.

DIR. DANNY AND MICHAEL

BY VICTORIA LUXFORD

PHILIPPOU

Australia has produced some impressive horror movies in recent years, most notably the iconic Babadook, which tapped into our deepest fears through deceptively simple techniques. Hoping to repeat that success is Talk To Me, the first feature from short film makers and popular Youtubers Danny and Michael Philippou (collectively known as RackaRacka).

Like so many scary classics, it’s about teenagers up to no good. Specifically, a group of friends who find an embalmed hand that gives them the ability to commune with spirits. The rules are simple: light a candle, hold the hand, and say “Talk To Me”. But whatever you do, don’t let them stay longer than ninety seconds or “they’ll want to stay”. The rush of the experience makes it an exciting experience for the group, but when grieving daughter Mia (Sophie Wilde) tries, something

The filmmaker brothers take classic horror themes and transport them to the real world. Mia comes by the seances through social media, where those taking part are filmed by a crowd of smartphones. This mixture of drama and ‘found footage’ gives the story a freshness that makes the jump scares and creepy moments all the more effective. As is the style with elevated horror, there are also emotions to contend with. Mia trying to find a new family with friends Jade and Riley (Alexandra Jensen and Joe Bird) sets up her vulnerability perfectly.

Wilde builds on those foundations to deliver an affecting performance, putting moments of humanity in between the more outlandish possession sequences. Hollywood star Miranda Otto pops up in a supporting role as Jade and Riley’s mother, furthering her status as a horror genre favourite after success in the Annabelle: Creation and Netflix movie The Silence.

A small film with a lot of style, Talk To Me is a modern take on possession horror that introduces exciting talents in front of and behind the camera.

A UKRAINIAN STORY PERFECT FOR NOW

RECOMMENDED

MAVKA: THE FOREST SONG

MALAMUZH

DIR. OLEH

BY VICTORIA LUXFORD

Drawing on mythology from the region, this Ukrainian animated fairytale is a surprising and poignant story for today’s audiences.

It centres on Mavka (voiced by Laurie Hymes), a kind forest spirit who signals the coming of spring. She is told to stay away from humans due to a generational feud between man and the forest, but begins to question that wisdom when she befriends kind musician Lukas (Eddy Lee).

Their connection, and a possible truce between worlds, is threatened by Kylina (Sarah Natochenny), who wants to use innocent people to find a magical tree.

If you thought this might have been the latest offering from Disney, that’s because its influences are clear to see.

The animation style is reminiscent of

the modern Princess movies like Frozen or Tangled (Lukas bears a strong resemblance to the latter’s Flynn Ryder), while the story borrows from many modern classics. To call it a ripoff would be selling the film short, however, as the animation lives up to that high standard. The forest, and its inhabitants, are all magnificently realised, while the wholesome environmentally friendly moral is sincere enough to be taken seriously.

Given the film’s origin, it would be tempting to draw a parallel between this story of defending yourself from invading forces and the ongoing war in Ukraine. That’s a stretch, as the emphasis is clearly on the natural world, but there is a message of overcoming oppression that sits nicely alongside the affection felt for the besieged country at the moment.

In a genre dominated by intellectual property and sequels, Mavka is a graceful callback to the heyday of standalone stories told well. In the crowded summer holiday lineup, this independent gem deserves to be discovered.

Movies about products are hot right now. Air, Tetris, and Barbie all found success analysing the myth of a popular icon; Apple TV+ now brings us the story of the Beanie Baby.

The Beanie Bubble is the story of Ty Warner (Zach Galifianakis), the smiling, eccentric face that struck gold in the 1990s with the invention of the eponymous cuddly collectables.

And while he soaked up the profits and plaudits, this film charts the phenomenon from the perspective of three women whose work was pushed aside by Warner’s lust for power.

Told in a jarring non-linear fashion, it’s difficult to ascertain what the film is trying to say. The timelines are all over the place, and the one common thread seems to be that most successes are driven by ruthless people.

It’s a valid point, but not a revelatory one, and the talented cast spend the duration of the film trying to make it seem like more.

Succession’s Sarah Snook plays a single mother who is initially angered by Warner but ends up marrying him and being one of the voices that gets lost in his success. As appealing as all three are, there’s just one problem – none of this is true. All three characters are an amalgam of real people but their roles and the story are fictional (Warner himself never married, but had two partners, one of whom Snook’s character is loosely inspired by). It isn’t the first biopic to do this, and the film states from the beginning that much of it is “made up”. However, it’s a selfdefeating approach when telling a story about voices needing to be heard.

The Beanie Bubble is inspired by a legitimate phenomenon, but takes nearly two hours to deliver less information than a Wikipedia article. Without a moral, or a message, the storytelling is as soft as the cuddly toys themselves.

THE BEANIE BUBBLE DIR. KRISTIN GORE AND DAMIAN KULASH BY VICTORIA LUXFORD

A SECRET SPECTACLE

cret Garden Party to be able to do and

crowd were brought to life with a ground-breaking spectacle that wasn’t only ingenuities and world-leading but the sort of collaborative vision that could only be pulled off by the best creative minds in the country. And, yes, it beat any performance I’ve seen at Glastonbury.

The BBC dedicates hundreds of hours of viewing time to Glastonbury, but

BEST OF THE FESTS

barely ever been seen, and looked as if it took months to design. The festival called it “the UK’s first ever fireworks and drone spectacle,” which wasn’t overstating it. Freddie Fellows, Secret Garden Party founder, called the collaboration “exhilarating and life affirming” and said the show was “collaboration at its purest. Doing this is everything we have ever wanted Se-

A MUSIC FOCUS: ALL POINTS EAST

If you’re just about the music then All Points East serves up the biggest bands in the world in London for a weekend. It’s a simple festival with big stages and not much else to do, but if that’s your idea of perfection then this year

The Strokes, Yeah Yeah Yeahs, Stormzy and Haim fill the bill. Jungle, Erykah Badu, Raye, Confidence Man and Tove Lo are also playing between 18th - 28th August. During the week the festival turns to the local community, offering free-to-attend events. Midweek programming includes theatre, music, workshops, family and wellbeing initiatives.

MORE THAN MUSIC: WILDERNESS

If you missed Secret Garden Party, there are more chances to party at similar events.

Wilderness, from 3rd - 6th August, has banquet feasts, theatre and immersive activities in a beautiful woodland setting. Once we participated in a full-scale cricket match and another time we went on an immersive adventure that found us searching through the undergrowth for clues to a mystery. This year wellbeing areas abound, and there is lake swimming alongside the lineup which features The Chemical Brothers, Christine and the Queens and Fatboy Slim.

The risk for failure, surely, was high. But then a speech by the late philosopher Alan Watts about how we are not individuals but one collective consciousness took the show forward, giving the visuals context, before the show was brought into the physical space with a mechanical flower bud opening out into a great flower, with tens of dancers dressed in floral costumes pirouetting around the base in front of a shimmering lake. Then a meticulously built effigy on an island was burned, and the equivalent of every Bonfire Night fireworks show in London went off at once to The Prodigy’s Firestarter.

It was signalling the future of live entertainment; how in the years to come we can use technology along with

PARTY PARTY: HOUGHTON

If you fancy a dance this summer, and are craving euphoric party hits instead of more relaxing tunes, try Houghton festival in Norfolk. Taking place this August 10 - 13, there is music going pretty much round-the-clock, with beats from some of the biggest DJ names in the world, including new electronic pioneer Call Super, alternative techno wizard Erol Alkan, and German selector Helena Hauff. The festival calls itself a “celebration of art and music,” which means interesting lighting installations and specially created structures and artworks are for exploring between sets.

physical performance to create fresh spectacles that hit harder than any of the singular elements, like fireworks, alone.

Secret Garden Party has a history of staging immense and unparalleled spectacles.

Birthed in 2004 with the idea that the attendees, rather than the bands on stage, were really at the centre of the party, and that fancy dress and audience interaction was what we all crave, it went on to inspire events like Bestival and Standon Calling by bringing way more creativity than just the music on the main stages. Secret events take place hidden deep in the woods or behind discreet doorways. Once an entire field of sunflowers laid behind a pretend portaloo door and groups of live musicians serenaded visitors who swept through

GOING ABROAD: OYA

This August, our international pick would be Oya Festival in Oslo. It features a fantastic cross-section of Norwegian music, showing off how the country punches about its sonic weight, but it is also known to be one of the greenest events in the world. That means clean toilets, industry-leading sustainability policies and swimming in the pristine fjords that are a short walk from the main stages, which are built onto green pastures. There are international acts too, and this year Blur, FKA Twigs and boygenius add to the lineup. The festival happens between 8th - 12th August.

the flowers.

They used to drive biplanes over the site on Saturday night and drop little floaty LEDs over the audience that floated slowly down over the festival site. When I first saw that, I struggled to find words, and last weekend, I felt that all over again for a festival thatdespite the challenges of Covid and closing for five years due to financial issues - still manages to bring creativity on an international scale. Well done, Secret Garden Party, I can’t wait to see what you bring next year.

SecretGardenPartyreturnsfrom25-28July 2024;buyticketsontheirwebsiteat secretgardenparty.com.Thedronedisplay wastitledCosmicWisdomandwas producedbyCelestial,whoproducedshows suchasEurovisionandLondonNYE2023

STAYING SOBER: LOVEJAM

How about a festival with none of the temptations of booze? It might sound like a terrible idea, but we tried one recently and leaving without a hangover on Monday morning was something of a game changer. There is a big rise in sober festivals, and one of the most prestigious is the Love Jam event which takes place this September between 7th - 11th in Eridge Park in Tunbridge Wells. The owners say their intention is to rethink the way we party and they throw regular events throughout the year too if you can’t make it to the main sober blow out in September.

Secret Garden Party proved that music festivals can do so much more, says Adam Bloodworth

TRAVEL

Beverly Hills, 9021: Oh!

The

Palace

in Hollywood,

Siobhan

Within a few short hours of arriving in Los Angeles, I’m sitting metres away from two of the most famous women in the world. While I attempt to stave off impending jetlag with dinner after checking in to the Beverly Hills Hotel, Kim Kardashian and Ivanka Trump are deep in conversation on the other side of the restaurant. By the following morning, their meal together has made headlines around the world. Turns out, this is an average Sunday night in the Beverly Hills Hotel. Every bit as famous as any of its celebrity guests, the distinctive pink hotel near upmarket shopping street Rodeo Drive is the reason Beverly Hills exists in the first place. Built in 1912 on bean fields surrounded by barren hillsides, the hotel was created to lure wealthy visitors to a prospective new neighbourhood, with a school and post office included on its grounds.

Other buildings sprang up around the hotel and Beverly Hills was named a city in its own right in 1914. Hollywood – a ten-minute drive away –may be known as the centre of the film industry, but this is where its biggest stars call home.

Almost every A-lister imaginable has checked in over the years and the hotel embraces its vintage Hollywood links, recently redesigning some of its bungalows in honour of former legendary guests. Elizabeth Taylor honeymooned here, Charlie Chaplin shot a film in the hotel and Howard Hughes lived in one bungalow for decades, getting the chef to hide roast beef sandwiches in the trees so he could snack as he wandered the grounds at night. Katharine Hepburn learned breaststroke in the palm-lined pool and Marilyn Monroe stayed countless times, celebrating Christmas with Joe DiMaggio in one bungalow.

Much remains the same even now, including the white jacketed-waiters, rose-thronged gardens and the distinctive splashes of pale pink throughout, a shade so specific that the hotel owns the trademark.

Yet the hotel isn’t a relic from a bygone era either. It unveiled a chic new spa last year, recently renovated its pool cabanas and counts everyone from Leonardo DiCaprio to Lady Gaga as regulars, hosting the pre-Oscars dinner each year.

The week before I stay, Keanu Reeves performed an impromptu set in the bar with Jimmy Fallon, while Nick Jonas and Priyanka Chopra are fellow guests when I’m there. For the best

chance of celebrity sightings, sit at the counter of in-house diner the Fountain Coffee Room for breakfast or a banana split, or book a table in the fairy-lit courtyard of the Polo Lounge for dinner.

Though it’s tempting to stay and people watch all day, it’s worth venturing beyond the red-carpeted entrance too.

Nearby Canon Drive is the best place to eat, while Beverly Drive is great for shopping if you don’t have a Rodeo Drive-sized budget. Head towards the Hollywood sign looming over the city in the distance and you’ll pass the hip shops and restaurants of Melrose Avenue and nearby Paramount Studios, where a two-hour tour offers an entertaining glimpse of the only major studio still in Hollywood itself. Afterwards, stop at the Hollywood Walk of Fame to spot hand prints in the pavement from the likes of Judy Garland, Clint Eastwood and Tom Cruise.

A sprawling, sun-baked city, LA is actually a collection of several cities in one, most notably West Hollywood, Beverly Hills and Santa Monica. Each has its own police force and

For the best chance of celebrity sightings, sit at the counter of in-house diner the Fountain Coffee Room

mayor, with different colour street signs revealing which city you’re in at any time. It’s almost impossible to get around without a car, with the beaches of Santa Monica almost an hour from the farthest reaches of Hollywood even if you avoid congested rush-hour traffic. If you don’t fancy driving, a private tour guide is a great way to maximise sight-seeing in a short time. Mine points out everything from the former Playboy mansion to the building used as Nakatomi

Plaza in Die Hard as we whizz through the city. He even drives through the Westwood Village Memorial Park cemetery, where the likes of Farrah Fawcett and Dean Martin are buried and Marilyn Monroe’s marble headstone is stained pink from fans’ lipstick kisses.

The new Academy Museum of Motion Pictures on Wilshire Boulevard is a little less eerie. Opened in late 2021, the museum offers a comprehensive insight into the film industry with exhibits ranging from movie costumes and original storyboards to the giant backdrop of Mount Rushmore used in Alfred Hitchcock’s North By Northwest. There are areas devoted to animation and special effects alongside special pop-up exhibitions, including ones on Black cinema, Pedro Almodovar and The Wizard of Oz when I visited. There’s also the chance to be filmed accepting a weighty, real-life Oscar in front of a simulated audience at the Dolby Theatre.

If you really want to feel like an A-lister though, spend a final few days at the Hotel Bel Air, a sister property to

the Beverly Hills Hotel. Hidden on a canyon in LA’s most exclusive neighbourhood, it’s a luxe retreat from the rest of the city, with its own river and flower-filled gardens concealing secret fountains and courtyards. Once a favourite with the likes of Grace Kelly and Monroe, locals including Oprah Winfrey and Beyonce are now regulars at its restaurant owned by celebrity chef Wolfgang Puck, who has catered the Academy Awards Governors Ball for nearly 30 years. Its LA’s most exclusive hideaway, a tropical oasis in the heart of this gritty, glamorous city that, despite serious competition, is still the biggest star in town.

BOOK NOW:

Rooms at The Beverly Hills Hotel start from $775 (approx. £640) per night and rooms at Hotel Bel-Air start from $695 (approx. £575) per night, both based on two sharing a Superior Room. Book both at dorchestercollection.com; Virginatlantic.com flies to Los Angeles from London Heathrow from £443 per person in economy. Private tours of LA can be booked at tourdujour.net.

Pink

is still the place to be seen

says

Grogan. From celeb-spotting to relaxing, this is still a rare paradise at 100 years old

Connecting the Community

Curiosity and criticism greet the arrival of new Worldcoin

THE emergence of Worldcoin and its curiously dystopian iris scanners has been met with confusion and raised eyebrows in London.

Brainchild of ChatGPT chief Sam Altman, the new cryptocurrency has seen people across the world turning up to have their eyes scanned for digital identification in exchange for a small amount of Worldcoin tokens.

Altman took the artificial intelligence world by storm earlier this year when his OpenAI company launched ChatGPT – a success which Worldcoin investors perhaps hoped would pave the way for further global triumph in the crypto markets.

However, an underwhelming uptake and lack of the anticipated crowds of customers clamouring to get their eyeballs scanned, coupled with some bruising industry-wide criticism may not have produced the instant triumph Altman might have expected.

To make matters worse for the billionaire entrepreneur, UK data watchdog the Information Commissioner’s Office has also announced it has its own eye on Altman’s eyeball-capturing technology.

“We note the launch of Worldcoin in the UK and will be making further enquiries,” the Wilmslow-based organisation announced on Tuesday.

In the UK, only three of the strange shiny orbs used to create digital IDs were available at launch – and all were in London where uptake was largely subdued.

Even among the few who did attend to claim their crypto and hand over

their ‘iris readings’, there was some scepticism and concern over privacy and data.

Generally, however, many of those who showed up were enthusiastic about Worldcoin’s project and the intentions behind it, despite several confessing they had little understanding of the technology underpinning it.

One enthusiast – Adam - travelled from his home near Dagenham to be

one of the first people to offer up his data in exchange for cryptocurrency at one of Worldcoin’s venues in Shoreditch.

“I’m a massive technology fan, and I’m a believer in crypto as the future, and just hearing what’s being said here about what Worldcoin are trying to do for that future just sounds pretty good to me,” said the 28-year-old student.

“But, listen, I’ll be totally straight

CRYPTO NEWS IN BRIEF

BINANCE PULLS PLUG ON GERMAN LICENSE

BINANCE has withdrawn an application to operate in Germany. The digital asset exchange has ditched attempts to gain a crypto license as it eases back on expansion plans due to the current regulatory climate in the US. In June, Berlin’s regulators told Binance it would be highly unlikely that a crypto custody license would be granted. A company spokesperson yesterday said: "Binance confirms it has proactively withdrawn its BaFin (Germany's financial regulator) application. The situation, both in the global market and regulation, has changed significantly."

SBF FACING FRESH ALLEGATIONS

SAM Bankman-Fried, founder of the collapsed FTX exchange, has paid $10 million to his legal defence counsel using stolen funds, it has been alleged. The 31-year-old disgraced entrepreneur has been accused of funding his legal team with millions taken from FTX’s hedge fund –Alameda Research – which was said to have been gifted by Bankman-Fried’s father – Stanford University law professor Joseph Bankman. A new lawsuit, filed in Delaware, claims a ‘Bankman Gift Transfer’ was made from his own FTX account to his “father’s personal account on the FTX US exchange”. “On information and belief, BankmanFried’s father has been using this ‘gift’ to finance Bankman-Fried’s criminal defence,” the lawsuit states.

with you – I’m here because it’s free crypto.”

Another willing participant – 31year-old legal executive Melissa – said she had little or no concerns about data protection and having her eyes scanned.

“If this is the level we have to reach to prove our own identity and protect our own identity, then I think we need to accept it,” she said.

Can US interest rates give crypto markets a jolt?

IT’S been another flat week in the crypto markets, with Bitcoin again largely stuck at around the $29k level. The market leader was trading at just below $29,200 last night. Ethereum’s Ether was also drifting in the same direction, trading for around $1.8k. Analysts were anticipating an interest rate hike through a Federal Reserve - the central bank in the US – announcement that has, historically, tended to jolt muted markets into action.

Matthew Ryan, head of market strategy at financial services firm Ebury,

recently explained: “On the one hand, the US economy continues to perform remarkably well, while on the other, the excellent news on inflation means that the Fed can take its foot off the gas and wait a few months for further developments.”

But will Washington’s approach to interest rates be enough to spark some life back into the market?

The big story in crypto this week has been Worldcoin, developed by OpenAI chief Sam Altman. Worldcoin launched on Monday after years in development. The project uses an eye-scanning ‘orb’

which must be used in-person, and gives users a unique digital identity to verify they are a real human.

The Worldcoin cryptocurrency can only be used once a user has verified their identity, while there is an accompanying app that allows users to make payments, purchase and transfers with it.

The project hasn’t been met with unbridled acclaim, though. Ethereum founder, Vitalik Buterin has said that a ‘proof-of-personhood’ concept faces major issues with privacy, accessibility, centralisation, and security.

OKX PUBLISHES POR RESULTS

CRYPTO exchange OKX today publishes its monthly proof of reserves (PoR) to reveal a balance of $11.3 billion in Bitcoin. The platform’s PoR covers 22 widely used digital assets with which it has maintained a reserve ratio exceeding 100 per cent for nine consecutive months across the assets. “Public-facing disclosures of both reserves and liabilities are essential to ensure longterm accountability in our industry,” said OKX Global Chief Commercial Officer Lennix Lai. “However, point-in-time attestations of reserve holdings mean little. Instead, sustained and consistent disclosures are needed.”

BOUNCE BOUNCING

“Risks include unavoidable privacy leaks, further erosion of people’s ability to navigate the internet anonymously, coercion by authoritarian governments, and the potential impossibility of being secure at the same time as being decentralised,” Buterin wrote

But will it impact the cryptocurrency’s already-impressive initial rise?

OFTEN overlooked auction protocol Bounce, which has spent much of the last year in a dormant state, has suddenly sprung into life. The Ethereum-based AUCTION token behind the Bounce platform - used mainly for incentives, rights and payments for listed NFTs – was last night trading at $7.60.

A sudden move to the upside yesterday morning saw it make a 24-hour price rise of more than 30 per cent, with a seven-day lift of 56 per cent as the 24-hour trading volume for the $47.8m market cap, two-year-old crypto hit an astonishing 700 per cent.

FOR ALL THE LATEST NEWS, VIEWS AND ANALYSIS HEAD OVER TO CRYPTOAM.IO

Ed Warner

VICTORIA’S premier Daniel Andrews expertly channelled Kath of Kath & Kim fame with his “look at moi!” presser last week when he pulled the state out of hosting the next Commonwealth Games.

Behind his baleful blue eyes sat a brain programmed to local politics –and a truth about the “friendly games” that must be addressed with urgency if they are to survive beyond 2026. Overblown and non-essential, they must be stripped down and redesigned to fit the modern football-mad age.

Commonwealth Games Federation CEO Katie Sadleir faces immediate twin challenges: to extract the maximum possible compensation payment from Andrews, and to persuade the Australian national government of its duty to find an alternative host for three years’ time.

The two are intertwined, as any dollars wrung from Victoria can be rolled into the emergency successor.

The Aussies themselves need to decide whether they want the Games to continue in any guise – not just in 2026, but beyond. An affirmative answer is not a given, but without the England v Australia medal table narrative, the Games are dead.

And while it is unsurprising to hear the London mayor’s office say the capital would be prepared to step in as host (and similar, albeit muted, signals from Birmingham and Glasgow), repeated editions in Great Britain would further erode the Games’ status, while emphasising the British Empire origins that are part of their existential challenge.

Let’s assume that Australia, embarrassed by Daniel Andrews’ U-turn, does step up and find a solution for the next Commonwealth Games.

If anything, those looser emotional ties will likely strengthen the national pride that has been bruised by last week’s decision – a nation that won’t want to be seen to have simply walked away. What then for 2030, and how might 2026 be used as a first step towards a sunnier future?

The current Games model places an enormous burden on local taxpayers. Invariably, host cities need support from central government. Hence the British city leaders’ cautious enthusiasm to be saviours in 2026 is conditional on cash from Westminster. Similarly, any Aussie rescue would need to be heavily funded from Canberra. Ticket revenues and income from local sponsorship deals fall far short of the costs of hosting, even if a city already has all the facilities. This does not mean the Commonwealth Games Federation is itself in financial clover; it is no International Olympic Committee. The CGF’s last accounts show a bare £6.9m of reserves, having generated a modest £1.5m surplus in 2022 – a Games year.

It is not creaming off rich global sponsor or broadcast revenues, generating just £21.5m of commercial income. Consequently it operates, of necessity, on a skeleton staff averaging only 16 people last year.

This shows that the CGF, and by extension its member national federations, has eyes that are far bigger than its stomach. Having aped the Olympics for far too long, the movement (as it likes to be known) has no excuse not to address frankly the scale of its ambitions for the Games.

An honest appraisal would recognise that the CWG caters for secondary

WHY GAMES NEED MAJOR REDESIGN

sports (athletics, swimming, gymnastics, cycling and netball) and a string of tertiary ones; creates an opportunity for Team GB to be broken into its constituents nations; and provides a multisport experience for thousands of athletes who might never compete in the Olympics – either by virtue of the sport they excel in or the level of their own abilities.

All of which should rightly be a cause for celebration. It is the diversity that the Games offers that can and should be their distinguishing feature.

Why not, then, invite more nations, not just those of the old Empire, revise the roster of sports to ensure they are all highly relevant in the modern world, and open up hosting opportunities across the competing nations? All underpinned by sensible finances – use existing facilities, strip away costly flummery, and make the athlete and

spectator experience primarily about the sport, not unnecessary padding. This all requires a rebadging to sever the Commonwealth name from the Games, to open the event up to different sports and nations. Get that right – and by the way, “friendly games” won’t cut it – and you would have the

opportunity to brand a series of elite international events across the course of a summer, taking place in either a group of geographically proximate countries or even across the globe.

Take athletes to the right venues for their sports. Let the blazers zig and zag around the world. Use modern comms and media techniques to create the story of the Games as they roll from sport to sport, from host to host and from virtual opening ceremony to virtual closing one.

Yes, spectators would lose the chance to go to lawn bowls and squash in the same day and athletes wouldn’t have a village in which to mingle (and more), but the cost savings could be huge, the love would be spread more widely, and what’s lawn bowls still doing there anyway?

It’s too soon to rebrand and open up membership in time for 2026, but the opportunity is there to nail a tighter event using existing venues, possibly right across Australia, that will point the way to a sustainable Games future.

Be a shame to lose ‘em.

HIS HEAD IS INDEED MASSIVE

Sport may be theatre without the scripted ending (and superior for that reason alone in my humble opinion), but Dear England at the National deserves its nightly standing ovation –even though we know Gareth Southgate’s England team will fall short at every performance.

Go for writer James Graham’s imagined insight into the culture change

wrought by Southgate, but go too for wonderfully cartoonish portrayals of players, politicians, blazers and the manager himself.

A particular audience favourite on the night I went was Harry Maguire. The producers must have searched long and hard to find such a talented actor (Adam Hugill) with an appropriately massive head.

BACK TO LIFE

It was a joy to be back in the London Stadium again as a guest of UK Athletics for the Diamond League last weekend. And nice to see so many seats filled for top quality athletics –the men’s 200m and women’s 5,000m were the highlights. Even better to meet a clutch of former elite athletes in the VIP seats who’d competed for GB in my time at the governing body and have now transitioned to new careers – either outside sport, inside it, or straddling the divide. And all probably more emotionally rewarding than punditry. Athlete career transitions are gaining increasing attention and are an opportunity for business to harness rare talents. This was first brought home to me a while back by British sprinter Joice Maduaka, who is now Global Leader, Athlete Programs for EY in Atlanta, Georgia.

TERRIBLE TWOS

Sport inc. is now two years old. New email sign-ups nicely outnumber those who unsubscribe each week. While that continues, I’ll keep bashing away. Thank you very much for reading!

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

The opportunity is there to point the way to a sustainable Games future

The Commonwealth Games (main) has a chance to reinvent itself in a time of crisis; and Adam Hugill as Harry Maguire in the play Dear England (left)

SURVIVAL OF THE FITTEST

Just how does the Commonwealth Games find itself a future?

Spurs could face Premier League questions after Lewis arrested

FRANK DALLERES

TOTTENHAM Hotspur could face questions from the Premier League and Uefa after former owner Joe Lewis was arrested in the US on more than a dozen insider trading charges.

The Bahamas-based British billionaire, 86, is due to appear in court today after being charged with 16 counts of securities fraud and three counts of conspiracy.

He is accused of “orchestrating a brazen insider trading scheme” by passing privileged information to friends, personal assistants, romantic partners and even his pilots.

Lewis owned Tottenham through the Tavistock Group but ceased to be a “person with significant control” of the club in October as part of what was billed as a “reorganisation of the Lewis Family Trusts”.

The Premier League confirmed that change was ratified by its owners’ and directors’ test. Members of the Lewis family are potential beneficiaries of the trust which majority owns Spurs, however.

That could put the club in the spotlight at the Premier League and European governing body Uefa if Lewis is convicted.

“If the charges against Joe Lewis are proven, this will raise significant continuous monitoring questions for both

CRICKET

the Premier League and Uefa if he remains a beneficiary of Bahamian Trust ENIC that owns the club,” Jonny Gray, Senior Managing Director for sport at Ankura, the global expert services and advisory firm, told City A.M.

English clubs voted in March to toughen rules governing owners and directors, including adding a program of continuous monitoring. They also approved the introduction of an independent oversight board, lowered the threshold to be considered to have control of a club, and widened the range of people to fall into the scope of the owners’ and directors’ test.

Individuals at Totten-

Team GB in for lowest gold tally in 20 years

FRANK DALLERES

ham could also face scrutiny over whether they received any insider tips from Lewis.

A Spurs spokesperson said his charges were “a legal matter unconnected with the club and as such we have no comment.”

Prosecutor Damian Williams, of the US Attorney’s Office for the Southern District of New York, said Lewis had engaged in “classic corporate corruption. It’s cheating and it’s against the law.”

Lewis’s lawyer David Zornow said: “Mr Lewis has come to the US voluntarily to answer these ill-conceived charges, and we will defend him vigorously in court.”

Stokes hails Anderson as best pace bowler in cricket history

MATT HARDY

ENGLAND Test captain Ben Stokes has thrown his support behind paceman James Anderson, describing him as the “greatest fast bowler to play the game”.

The 41-year-old seamer has managed to take just four wickets in this year’s Ashes and has struggled to make the same impact as in previous series.

England cannot win the Ashes but can deny Australia their first series victory on these shores since 2001 by winning the fifth Test at the Oval, which starts today.

“Although he’s not had the impact

he would have liked to in this series, he’s a quality bowler,” said Stokes.

“It’s very hard for anyone to sit here and say he’s not. Jimmy’s come under a bit of flak for that but if Joe Root hadn’t scored the runs he would have liked, you wouldn’t be questioning him staying in the team as a batter. James Anderson is the greatest fast bowler to play the game and he's still looking as good as he was two years ago.”

Anderson has 689 wickets in all, and has taken the most scalps of any fast bowler in the history of the five-day game. Fellow bowler Stuart Broad, 36, reached 600 wickets in the Test at Old Trafford.

TEAM GB athletes are predicted to win just 10 gold medals at the Paris 2024 Olympics, their lowest tally for 20 years.

Schoolgirl skateboarder Sky Brown, 15, 800m runner Keely Hodgkinson and BMX star Bethany Shriever are among those tipped to top the podium by analysts Gracenote Sports.

Gymnasts Jessica Gadirova and Bryony Page and taekwondo’s Bradly Sinden are also among Britain’s leading hopes to become Olympic champions.

But the tally of 10 is significantly down on the 22 golds they won in

Tokyo two years ago and barely over a third of their record 29 in London.

The last time they performed so poorly was at Athens 2004, when they won nine golds from a total of 30 medals.

Team GB are forecast to win 62 medals in total at Paris 2024, two fewer than the last Games and just seven fewer than the highwater mark of 67 at Rio 2016.

The projected table for Paris 2024 has USA top with 128 medals, followed by China on 68, host nation France on 63 and then Britain.

“I think we’ve got a great opportunity to be the top European nation again, despite the fact that

the home nation is very, very strong and getting stronger for a whole variety of reasons,” said Team GB chef de mission Mark England. “So top European nation, top five are our aspirations. I know that we are medal-competitive in a significant number of sports. I think we’ve got all of those building blocks, notwithstanding we’ve got another 12 months to build.” Brown won bronze, aged 13, at the delayed Tokyo 2020 Games and has since won gold at the World Championships and X Games. Hodgkinson is reigning European champion and won silver at the last Olympics and World Championships.

Liverpool in partial Anfield closure amid revamp delay

MATT HARDY

LIVERPOOL’S revamp of the Anfield Road End of their stadium will not be open in time for the start of the new season, the club have confirmed.

The £80m development will see the stadium’s capacity increased to 61,000 but the club will now operate a phased reopening of the stand until October.

“Unfortunately, the upper tier of the Anfield Road Stand is not quite ready for the Bournemouth game,” they said.

“The main contractor, Buckingham, will therefore work with Liverpool City Council’s licensing team to deliver a phased opening process.

“As with any complex major con-

struction project of this scale, there are always so many variables and challenges along the way.

“We appreciate everyone’s patience and understanding while we work through the next few weeks with Buckingham to complete this programme.”

The club is set to offer seats for the stand in a ballot for areas which are not contracted to fans such as season ticket holders.

Liverpool open their Premier League campaign away to Chelsea in the capital before hosting Bournemouth in their opening home match of the season on 19 August.

Liverpool operated a phased reopening when the Main Stand was rebuilt.

Lewis surrendered on charges of insider trading

FOOTBALL

Scotland friendly against Italy will show where each side want to be

IWAS over the moon when I discovered that the northern hemisphere Rugby World Cup warm-ups were getting underway this week. It may not be the turn of France or England yet but it’s good to see international rugby back ahead of one of the biggest and most unpredictable World Cups in a long time.

Scotland take on Italy on Saturday at Murrayfield while Down Under there’s a Bledisloe Cup tie between Australia and New Zealand in the 100,000 seater Melbourne Cricket Ground – host of the second Test against the British and Irish Lions in 2025 – and a match between South Africa and Argentina.

But focusing on two of Europe’s top nations, it is fascinating to see how both Gregor Townsend’s Scotland and Kieran Crowley’s Italy look at this match north of the border.

Do you go all in, lay down a marker and risk injury? Or do you try to preserve energy, which risks injury in another way? It is a double-edged sword.

Scotland are a weird outfit at the moment. They have the talent, much of it originating from overseas, but they have mavericks like Finn Russell, too.

They will miss Staurt Hogg, who retired from the game last month, rather surprisingly.

He was such a stalwart for the Scots and one of their senior lads who could just be relied upon.

He leaves a gaping hole on the field, one which will be difficult to fill with any meaningful replacement.

Scotland are stuck in a pool with Ireland and South Africa so they’re some-

SCOTLAND AND

AT THE WORLD CUP

SCOTLAND vs South Africa

10 September, Marseille vs Tonga

24 September, Nice vs Romania

30 September, Lille vs Ireland

7 October, Paris

ITALY vs Namibia

9 September, Saint-Etienne vs Uruguay

20 September, Nice vs New Zealand

29 September, Lyon vs France

6 October, Lyon

2023 RUGBY WORLD CUP BAROMETER

In association with

PLAYER OF THE WEEK Fiji fly-half Caleb Nuntz

RUGBY

COMMENT

Ollie Phillips

what seen as outsiders to progress through to the last eight.

But they open against South Africa and close against Ireland so they can at least target those two matches and have a rest in between. If Ireland are struggling with the reintegration of Johnny Sexton, Scotland will target that game with the hope of displacing Ireland in the quarter-finals.

Scotland can be a threat to any side but I just don’t see them challenging. That said, they will obviously back themselves, and their campaign technically starts this weekend against Italy.

Fiji have never struggled for power and pace but have sometimes struggled with 80-minute game management. Ben Volavola is the main man at No10 fbut in their 36-20 win over Tonga last weekend it was debutant fly-half Caleb Nuntz who stole the show. The 23-year-old Fijian Drua out-half split the posts on four occasions and contributed nine points to his team’s tally. With a reliable back-up to the capable Volavola, Fiji are undoubtedly stronger.

WHO’S HOT WHO’S NOT

The Azzurri are a bit of an unknown. Their head coach is out of the door after the World Cup and they never seem to be able to string together a number of performances that makes them look remotely competitive to opposition sides.

In a pool with New Zealand and hosts France, many consider Italy’s best run at the showpiece event a third place finish in the pool.

Scotrland want to use these warm-ups to prove they’re competitive and they’ll want the scalp of Italy as part of that.

The Azzurri head to Dublin next week and host Romania and Japan this summer.

I love the World Cup, and the warm-ups for me signify the beginning of that process.

We’re properly in it now and I cannot predict the winner.

Former England Sevens captain Ollie Phillips is the founder of Optimist Performance, experts in leadership development and behavioural change. Follow Ollie on Twitter and on LinkedIn.

Val Rapava-Ruskin is seen as one of the best looseheads in England, but that did not stop him from being dropped this week.

Juan Martin Gonzalez could have gone into the Rugby World Cup without a club but Saracens have snapped up the Argentinian powerhouse.

Japan talisman Michael Leitch was sent off last week for a high tackle. The Brave Blossoms will be hoping any ban is a short one.

Christian Leali’ifano has 26 caps for Australia but, via new eligibility rules, he started for Samoa in their 24-22 win over Japan.

ITALY

Scotland will probably finish third unless they beat Ireland