Wednesday 21 June 2023

LONDON’S BUSINESS NEWSPAPER

LIFE IN PLASTIC WE CHAT TO MATTEL BOSS YNON KREIZ ABOUT ALL THINGS BARBIE P18

CITY SET FOR HIGH-END OFFICE BOOM

CITY COULD REQUIRE EQUIVALENT OF FIFTEEN SHARDS OF ADDITIONAL OFFICE SPACE IN NEXT TWENTY YEARS

JAMES SILVER

THE CITY OF LONDON could need as much as 20m square feet of additional office space by 2042, according to a new report, as corporates continue to invest in higher-quality headquarters.

The report, conducted by Arup and Knight Frank, finds that office tenants are “seeking a stepchange in the quality of space” that they offer employees, as they bid to rebuild office-based working after the pandemic.

The two firms modelled three differing scenarios of the City’s future, with a ‘hybrid peak’ middle scenario resulting in an additional 60,000 jobs in the Square Mile and 13m additional square footage. The Shard in London

HEARTBREAK AUSSIES

CLINCH

FIRST ASHES TEST AS LIGHT FADES P24

Bridge contains just more than 1.3m square foot.

Whilst the pandemic saw many predict a significant slowdown in the office market, a host of projects have been given approval over the past two years. Amongst the skyscrapers already approved are two new additions to Gracechurch Street and a 56-storey building on Leadenhall Street.

Part of the requirement for additional space comes from an increased number of jobs in the Square Mile, with the Greater London Assembly anticipating around 85,000 jobs to be added in the City by 2041.

The City of London Corporation, which commissioned the report, said it would look at the report’s recom-

mendations to fast-track planning applications to retrofit existing office space for environmental reasons as well as introduce “a greater mix of uses” to parts of the City.

The report also suggested the City “continue to promote and invest in... [the] workplace experience” which focuses on improvements in the public realm.

The Corporation could also consider business rate relief or other targeted measures to encourage the return of long-term vacant sites into use.

Recent research by Knight Frank suggested that some 47 per cent of multinational firms are looking to replace their corporate headquarters in the next three years, with talent attraction and retention the top priority.

The chair of the Corporation’s planning and transport committee Shravan Joshi said: “We are not only on the right track to meeting the amount of office space demand in the City, but also delivering the right type of space.”

EXCLUSIVE

NICHOLAS

THE UK’s largest undeveloped fossil fuel field – home to potentially 500m barrels of oil and gas – is set to be approved by regulators within the next two weeks, City A.M. understands.

The North Sea Transition Authority (NSTA) and the Offshore Petroleum Regulator for Environment & Decommissioning are due to sign off on the project, known as Rosebank, before it is sent to energy secretary Grant Shapps for final approval.

Following the regulators’ approval, it is understood that the oil firms

backing Rosebank, Equinor and Ithaca will release their final investment decisions.

The Norwegian energy giant did not offer a timeline for the project but a spokesperson told City A.M. that Rosebank could “counteract the decline in domestic oil and gas production” and contribute to “UK and European energy security”. Ithaca declined to comment, but City A.M. understands that while it was initially unsure about its role in the project, it is now more upbeat about the future of the project following recent talks with the government. The NSTA and the government both declined to comment.

Former supermarket supremo: There’s no evidence of grocer profiteering

EXCLUSIVE

LAURA MCGUIRE

THE FORMER boss of Sainsbury’s has roundly rejected claims that British supermarkets are profiteering during the cost of living crisis, arguing that the government and regulators should focus on helping

those in need instead of considering “interfering in markets”.

“This idea that [supermarkets] are somehow profiteering in these circumstances… it doesn’t even pass a basic smell test,” Justin King (pictured) told City A.M.

Chancellor Jeremy Hunt met with supermarkets last month over

concerns about the current cost of living, and the Competition and Markets Authority (CMA) has also opened an investigation into whether a lack of competition is contributing to grocery prices being higher than they would be in a well-

functioning market.

However, King, who served as the boss of Sainsbury’s for 10 years until stepping down in 2014, said that both Tesco and Sainsbury’s reported a decline in their profit margins in their most recent financial results.

“There is no profiteering,” King said. “It is not grounded in the reality of publicly available and reported numbers.”

“I would encourage the CMA not to respond to the political conversation and focus on the facts, which is what their job is supposed to be,” he said.

ROSEBANK UK’s largest potential oilfield inches closer to approval

UK’s trade problem is not a lack of will, but of government action

PER THE business secretary, Britain’s trade problem is that we don’t think we can. Apparently our ‘sardonic’ sense of humour holds us back from sailing the seven seas like mercantile Brits of old. Even by the standards of recent years, it’s an absurd statement. It sums up a wider dereliction of duty in Westminster towards British business –one that ranges from asking HR departments to check immigration status to

STANDING UP FOR THE CITY THE CITY VIEW

calling on pension funds to take more risks on UK investments at the exact same time that they dawdle on changing regulations to allow it, instead pushing them towards long-dated bonds. With the CBI now (in theory) free to be the voice of business once

more, they could perhaps relaunch their lobbying campaign by projecting a sign on parliament, which simply reads “it’s not the private sector’s fault”. Rather than hectoring, the government could act. The idea that exporting goods to Europe is as easy today as it was in 2016 is for the birds; there are benefits of Brexit, but a simpler export system is blindingly obviously not one.

Rishi Sunak’s efforts to make life easier through the Windsor Declaration have helped, but life remains difficult.

The business secretary would do better to acknowledge the real barriers that exist rather than pinning the blame on business leaders fed up to the back teeth with additional bureaucracy. Indeed, a little less conversation and a little more action would be welcome in all manner of areas, not least actually unleashing those benefits of Brexit. We await with bated breath.

GLOW UP COMPLETE Following a three-year transformation period, induced by the pandemic, the National Portrait Gallery in Trafalgar Square reopens tomorrow

WH Smith, M&S and Argos among firms fined for failing to pay minimum wage

JESSICA FRANK-KEYES

HUNDREDS of businesses including WH Smith, M&S and Argos have been named and shamed after being fined for not paying workers the minimum wage.

Firms from sole traders to household names were ordered to repay 63,000 staff lost wages totalling close to £5m, after breaching National Minimum Wage (NMW) law.

WH Smith topped the list for failing to pay more than £1m to over 17,000 workers, closely followed by Lloyds Pharmacy, which had to repay over

£900,000 to almost 8,000 of its staff.

Supermarket and clothing retailer M&S failed to pay more than 5,000 employees almost £580,000, while Argos, owned by Sainsbury’s, repaid over 10,000 workers over £480,000.

Bingo operator Buzz Group also failed to pay close to £320,000 to more than 3,000 staff.

Small business minister Kevin Hollinrake said: “Paying the legal minimum wage is non-negotiable and all businesses should know better than to short change hard-working staff.”

The 202 businesses were cumulatively fined a further £7m, payable to

HMRC, in what ministers said was a “clear message from government that no employer is exempt”.

The Department for Business and International Trade and HMRC refused to tell City A.M. how many companies were also fined, and by how much.

A spokesperson for WH Smith said the lapse was “a genuine error” and was “rectified immediately”. Spokespersons for Sainsbury’s and M&S said similar, with the former citing “a payroll error” and the latter “an unintentional technical issue” taking place over four years ago.

WHAT THE OTHER PAPERS SAY THIS MORNING

THE INDEPENDENT

ANDREW TATE CHARGED WITH RAPE AND HUMAN TRAFFICKING

Misogynist influencer Andrew Tate and his brother have been charged in Romania with human trafficking, rape and forming a criminal gang to sexually exploit women.

THE GUARDIAN GERMAN TABLOID BILD TO REPLACE RANGE OF EDITORIAL JOBS WITH AI Germany’s Bild tabloid, the biggestselling newspaper in Europe, plans to replace a range of editorial jobs with artificial intelligence as part of a €100m costcutting programme.

THE FINANCIAL TIMES SUNAK UNDER PRESSURE TO BREAK SILENCE OVER BORIS JOHNSON REPORT

Rishi Sunak is under growing pressure to break his silence over the parliamentary report into Boris Johnson’s conduct, as a backlash from Tory MPs deepens.

Post Office boss defends Horizon compensation as fair

HENRY SAKER-CLARK

THE BOSS of the Post Office has said he expects its compensation scheme for sub-postmasters affected by the Horizon IT scandal to “conclude” very soon as he supported the level of pay-outs for victims.

Errors made by Horizon software, which was made by tech firm Fujistu and used by the Post Office, led to the wrongful conviction of more than 700 people over false accounting and theft between 1999 and 2015.

Post Office chief Nick Read said he

believes the process of its historic shortfall scheme to repay victims has been fair despite fierce criticism from MPs at yesterday’s Business and Trade Committee.

It follows reports that previously convicted postmasters have seen compensation payouts heavily reduced.

When questioned whether pay-outs were fair, Read said: “Our objective is to make sure this is fair. I understand the principles and the approach to fairness that is being applied. I believe that is the case and I believe it is happening that way.”

UK pay still rising at threedecade high

JACK BARNETT

UK PAY has risen at its fastest pace in over three decades for the fifth quarter in a row in a sign that the Bank of England may have to keep raising interest rates to get ahead of inflation, new figures out today show.

Workers notched an average six per cent wage increase in the three months to May, meaning pay growth is still running at its hottest level since 1991, according to Xpert HR.

The most common wage lift was five per cent over the last three months, a level experts think isn’t compatible with the Bank’s two per cent target.

The numbers are likely to raise the chances of Bank governor Andrew Bailey and the rest of the Monetary Policy Committee jacking up rates for the 13th time in a row tomorrow.

Last week, the Office for National Statistics (ONS) revealed wages are acceler-

ating at more than seven per cent, the second quickest rise on record, prompting markets to lift their peak Bank rate expectations to just under six per cent.

Traders think a 25 basis point increase to 4.75 per cent is the most likely outcome tomorrow, although they reckon there is an outside chance of a larger 50 basis point jump.

Wages have been rising quickly over the last year due to workers responding to rapidly accelerating prices.

Inflation peaked at 11.1 per cent in October.

ONS data today is poised to show it dropped to 8.3 per cent in May, although the City has consistently undershot its inflation projections.

Employers struggling to source staff is also steering them to raise starting pay to attract talent.

The Bank has said that it needs to see a sustained cooling in wage growth before it stops hiking interest rates.

Financial support from the UK will also include £240m of bilateral assistance

Ukraine set to receive £3bn in World Bank loan guarantees

JESSICA FRANK-KEYES

UKRAINE is set to receive £3bn in World Bank loan guarantees as Prime Minister Rishi Sunak confirmed the UK would continue to support the nation for “as long as it takes” in the fight against Russia.

It comes as the UK hosts a two-day Ukraine Recovery Conference in

Hunt to discuss support with mortgages

JESSICA FRANK-KEYES AND STAFF

CHANCELLOR Jeremy Hunt is set to meet with mortgage lenders to discuss support for homeowners as a repayments crisis looms.

Various calls have been made for the government to step in to help borrowers, but Hunt said ministers would not provide financial support which would fuel inflation.

Average costs for a two-year fixedrate residential mortgage jumped to above six per cent this week, due to the prospect of interest rate rises from the Bank of England.

Sparking opportunities with Wimbledon

London, starting today.

Sunak told City A.M.:“The City has a huge amount to offer, from its deep and liquid capital markets to its world-class finance expertise,” he said.

The PM is also set to expand investment in Ukraine for public services, schools and hospitals in the first G7 bilateral multi-year fiscal assistance package.

Hunt is due to meet with lenders on Friday, to ask what help they can give to those struggling. However, the Chancellor ruled out mortgage interest relief at source schemes, describing them as “injecting large amounts of cash into the economy, [which] right now would be inflationary”.

Ahead of Friday’s meeting, lenders said they are doing their “best to help” customers affected. A spokesperson for trade association UK Finance said: “Lenders stand ready to help anyone struggling with their mortgage payments.”

Frances Tiafoe

UBS to pay huge fines over CS’s Archegos failing

CHRIS DORRELL

UBS IS reportedly set to pay out hundreds of millions of dollars in fines over Credit Suisse’s failings linked to the collapsed hedge fund Archegos Capital.

Credit Suisse was one of the banks hit hardest by the collapse of Archegos, with the bank facing losses of around $5.5bn (£4.3bn). UBS faced a $861m loss.

Regulators in the UK, US and Switzerland have completed their investigation into Credit Suisse’s relationship with the hedge fund, which collapsed in 2021, the Financial Times reported.

The UK’s banking regulator, the Prudential Regulation Authority (PRA), could impose a £100m fine while the US Federal Reserve might impose a

penalty of up to $300m, the Financial Times reported.

Finma, the Swiss financial markets regulator, has no power to fine the banks it supervises, although it called for more powers after Credit Suisse’s collapse.

UBS has asked regulators in the US, UK and Switzerland to publish their findings from investigations into

UK banks lead against Europe on AI readiness

CHRIS DORRELL

UK BANKS are leading against European rivals in their preparation for AI –but still have much further to go to secure global leadership, new research shows.

Edinburgh-based Abrdn has offloaded its stake in HDFC Asset Management

Abrdn shareholders could be set for payday after £337m HDFC sale

CHARLIE CONCHIE

Credit Suisse’s mishandling of Archegos Capital before the end of July.

UBS, the PRA and Finma declined to comment. Credit Suisse and the Federal Reserve did not immediately respond to requests for comment.

ABRDN has offloaded its entire stake in Indian asset manager HDFC and could be set to ramp up share buybacks as it looks to put cash in investors’ pockets. In a statement , the vowel-stripped investor said it had sold its remaining 10.2 per cent stake in HDFC Asset Management for £337m via a subsidiary firm.

Mumbai-based HDFC has plunged in value over the last four years after its all-time peak in 2019.

Abrdn first began offloading its stake in the company last year, dumping its six per cent stake for £225m.

A $40bn (£31.5bn) merger between HDFC’s parent firm Housing Development Finance Corp and HDFC Bank is scheduled to close next month.

A new study from IT and consultancy firm Accenture – shared exclusively with City A.M. – shows around a third of UK bank board members have tech experience compared to 13 per cent in Europe.  Every single bank board had at least one member with a technology background, compared to 78 per cent worldwide.

“The UK market is characterised by significant investment in technologies like cloud and AI; stiff competition from neo-banks; regulatory interest in tech resilience; and a deliberate focus by chairs to evolve their board composition," Andy Young, Accenture’s financial services talent and organisation lead, told City A.M.

However, the research shows that progress has slowed separate research has showed that US banks were leading the world in the increasingly important AI arms race.

Let’s talk about making the most of living longer.

thephoenixgroup.com/living-longer

We need to talk about 1 in 3 children born today having a good chance of living to 100. Let’s start having that conversation.

London small firms dominate fast growth list despite inflationary drag

CHARLIE CONCHIE

LONDON’s small businesses have dominated a list of the country’s fastest growing firms this year despite inflation dragging on growth across the country, according to new research.

In a ranking of the UK’s 100 fastest growing small firms by business group FEBE, 26 per cent of firms hailed from the capital while 13 per cent came from the broader south east. Yorkshire came in at third

position at 11 while Scotland had nine high growth firms.

The annual list, which ranks the top 100 profitable small businesses with founders still involved, found that a host of London firms had shrugged off a surge in costs this year to post bumper growth.

However, FEBE founder and former Big Four auditor John Maffioli told City A.M. the economic downturn had slowed growth across the board and narrowed the field of firms.

He said the group found a major

Lookers: UK firm agrees to £465m buyout by Alpha

GUY TAYLOR

BRITISH car dealership giant Lookers has agreed to be bought out by Canada’s Alpha Auto Group (AAG) after it launched a £465.4m acquisition bid, continuing a string of corporate deals in the sector.

Global Auto Holdings Limited – the bidding vehicle for the takeover – announced the acquisition yesterday, with the bid worth 120p per share.

That price represents a substantial 35.3 per cent premium to Lookers’s share closing price of 88.7p yesterday.

Lookers’s bidders see the company as a key pillar to enable it to become a global leader and expand overseas.

Kuldeep Billan, founder and executive chair of AAG, said the deal was a “compelling opportunity to acquire one of the leading UK auto retail groups”.

“With the UK auto retail market undergoing substantial change, including the adoption of new distribution models, we believe that the wider group is well positioned to navigate the current environment with geographically diversified operations and a focus on operational excellence.”

Russ Mould, investment director at

BEHIND THE DEAL

£ Dealmakers including Jefferies’s Philip Noblet and James Thomlinson, as well as BMO Capital Market’s Jeff Watchron, worked with the Canadians as financial advisers. Lookers were advised by Peel Hunt and Nimus. Eversheds provided the legal muscle to Lookers whilst Skadden Arps worked for Alpha Auto Group. PR advice came from Hudson Sandler for the buyers, and MHP for the car dealership.

AJ Bell, said: “Scale matters in this industry and operators are always looking for a way to plant more flags, be it locally or internationally.”

The acquisition follows considerable speculation that a takeover of the UK car retail firm was close, following reports from Sky News’s Mark Kleinman.

Lookers recently delivered impressive trading performances, exceeding expectations with £4.3bn revenues in its last full year results and recently acquired Fourway Vehicles.

“impact on profitability” among smaller firms this year.

The strong performance for London firms came despite rocketing inflation and energy costs buffeting the UK this year and triggering a sharp rise in insolvencies.

The number of SMEs that disappeared in London last year swelled to 53,880, up sharply from 37,350 in 2017, according to analysis of Office for National Statistics figures by the Liberal Democrats shared with City A.M.

GLOBAL PUSH UK Tote Group and Hong Kong Jockey Club sign five-year deal to bolster ‘World Pool’ international partnership

LDI funds withstanding pressure in gilt market, says BoE member

CHRIS DORRELL

LIABILITY driven investment funds (LDIs) have maintained “high levels of resilience” despite recent volatility in the gilt market, the Bank of England’s Jonathan Hall said yesterday.

Hall, an external member of the Bank’s Financial Policy Committee (FPC), said that recent moves in gilt

yields had been “significant” as investors reassessed the likelihood of further rate hikes.

This movement in gilt yields

“mechanically reduced the resilience of LDI funds”, Hall said. Yields and prices are inversely linked, meaning a spike in yields trims the value of LDI funds’ assets.

Hall noted many funds have

recapitalised in order to restore their buffers, limiting the impact of the spike in yields.

His speech came a day after the Bank launched its first system-wide stress test in a bid to better understand the impact of shadow banks –which provide many of the same functions as banks but without the same regulation –on financial stability.

BoE FPC member Jonathan Hall said LDIs were proving resilient

Over a quarter of the UK’s fastest growing small businesses are in the capital

THE UK Tote Group –operators of the Tote –and the Hong Kong Jockey Club have signed a new five-year partnership which will see British racing given a healthy boost. A key element of the partnership is the ‘World Pool’, a joining together of a series of global pools into one, increasing liquidity in the market and delivering a healthier return to British and Irish racing.

Octopus Electric Vehicle secures £150m in funds

OCTOPUS Electric Vehicles, the energy company’s electric car leasing business, has secured a £150m funding boost, taking its two-year total fundraising total to £650m. The funding will help finance Octopus’ employee benefit scheme, which gives employees at firms who opt in a chance to save around 30-40 per cent by providing the electric vehicle, charger and a discounted energy tariff.

Octopus claims its car leasing business will prevent 32,000 tonnes of carbon dioxide from being emitted each year – the equivalent of removing around 11,500 fossil fuel cars.

Octopus Electric Vehicles, said: “Drivers are increasingly seeing the benefits of switching out old gas guzzlers for electric cars.

“With demand soaring, we need manufacturers to continue to increase volumes.”

Despite challenges faced by the sector in recent months, particularly surrounding the UK’s electric vehicle and battery manufacturing capacity, UK electric car sales are still on the up.

Battery electric vehicle sales jumped 58.7 per cent in May, and made up 16.7 per cent of total car sales for the month, according to data from the Society of Motor Manufacturers and Traders.

Octopus secured the funding from private equity firm Pollen Street Capi-

Cost of hurricanes in US set to skyrocket

THE COST OF US hurricanes could increase by at least 10 per cent over the coming 20 years according to a new research collaboration between Columbia University and insurance giant Aon. The number of so-called catastrophic weather events has been climbing in recent years, with

climate change increasing both the number and severity of hurricanes, floods and other unusually severe weather conditions.

Aon research produced earlier this year suggested that the cost of natural disasters was around $313bn (£245bn) in 2022, with insured losses totalling $130bn.

Insurance titans including Aon have been investing in more

sophisticated modelling and forecasting tools recently as the number of events –and the cost of insuring them –has crept up. Aon has also worked with the University of California as it attempts to predict the size and scale of future wildfires in the United States as the western hemisphere becomes hotter and drier.

GUY TAYLOR

Fiona Howarth, chief executive of

Revolution Beauty mulls legal action against former CEO over audit delay

LAURA MCGUIRE

REVOLUTION Beauty will potentially take legal action against the company’s founder and former chief, Adam Minto, over claims he breached fiduciary and statutory duties while at the helm.

In a letter to investors, the makeup brand said it believes Minto’s alleged wrongdoings led to

delay in audit of the full year results in 2022 group’s, which led to suspension of the company’s shares from trading on AIM.

Minto, who founded the brand nearly a decade ago, resigned last year after its auditor, BDO, raised concerns about the delay of the financial report.

The cosmetics group said Minto has until 7 July to respond to claims made against him in the letter.

A statement read: “The company takes these matters extremely seriously. It is important for shareholders to note that there can be no certainty on the outcome of these legal proceedings, and the company will make further updates to shareholders as appropriate in due course.”

Adam Minto was not immediately available for comment.

Saga cruising for success as travel bookings surge

GUY TAYLOR

SAGA YESTERDAY said it expects profits to be “well ahead” of the previous year, driven by a strong performance from its ocean cruise and travel section – but its insurance arm continues to weigh it down.

The over-50s specialist saw £150m in booked revenue from its travel segment as of this week, 37 per cent ahead of the same point last year –driven by an uplift in demand.

The insurance and travel group also claimed it had seen a record launch for its ocean cruise season, which has already seen a booking load factor of 34 per cent, ahead of last year, as the firm rides the wave of a post-pandemic uptick in holidaying.

It is currently on track to deliver pretax earnings of £40m per ship, as it prepares for the more profitable late summer period.

Saga’s shares climbed to close up 4.26 per cent after the announcement, a welcome uptick for the firm which has seen its share price decimated in the last five years, not helped by the pandemic.

Saga chief executive officer Euan

Sutherland said: “We have taken strong bookings for our ocean cruises with a load factor that is ahead of the same point in the prior year, and our river cruise and travel businesses are on track to return to profitability in line with previous guidance.”

It comes amid a post-pandemic surge in the broader travel industry, which saw Saga report a 50 per cent revenue boost in its April results.

Despite the boost in Saga’s cruise and travel divisions, the company was weighed down by a challenging year for its insurance segment, specifically motor, as high inflation and the cost of living continued to dent performance and prompted a rise in the price of premiums.

“In insurance, market conditions, particularly in motor, continue to weigh on our group result,” Sutherland said. Policy sales in car and home insurance were seven per cent behind last year.

In January, Saga confirmed that it was in talks to sell off the insurance arm of its underwriting business, in an attempt to raise £90m to help pay down some £721m in debt accrued during the last decade.

Wirecard fraud trial: Singapore issues first criminal convictions

LUCY KENNINGHAM

TWO Wirecard executives have been given criminal convictions in Singapore’s prosecution of the German payments company.

James Aga Wardhana and Chai Ai Lim were given 21 and 10 months respectively for conspiring to

misappropriate funds, according to Wirecard’s staggering collapse occurred in June 2020 when it was revealed that half its £2bn revenue did not in fact exist.

It was once viewed as a highly successful startup worth £24bn. Former director Edo Kurniawan is missing –a warrant is out for his arrest. The trialis expected to end in 2024.

The insurance and travel group has been enjoying a post-pandemic boom

CEO Markus Braun is in pretrial custody

LONDON CALLING

Westfield will hand back the keys to its flagship San Francisco mall following nearly two decades of ownership after it was battered by crime and the exit of its 350,000ft flagship Nordstrom site.

In recent years, the shopping centre’s occupancy level plummeted dramatically to around 55 per cent, with a host of household-name retailers bailing out.

The decline has largely been blamed on the California city’s social problems, with downtown struggling with crime and a homelessness epidemic.

Just a few miles away in neighbouring San Jose, Westfield said its Valley Fair site is performing well.

“Given the challenging operating conditions in downtown San Francisco, which have led to declines in sales, occupancy and foot traffic, we have made the difficult decision to begin the process to transfer management of the shopping centre to our lender to allow them to appoint a receiver to operate the property going forward,” a spokesperson said.

Shopping centres have been struggling for some time, as their once sparkling appeal of having a range of retailers located under one roof fails to impress consumers who now have access to an endless conveyor belt of trends through online shopping.

But does the decline of Westfield’s San Francisco site mean much for their London destinations?

“There are still problems in the UK but they’re lucky to have two really good spaces in terms of Stratford and Shepherds Bush,” John Hoyle, founder of flexible pop-up retail space provider Sook, told City A.M.

Sook research suggests that the two sites operate at about a 10 per cent vacancy rate.

That’s “not a good thing,” Hoyle notes but says in comparison to other shopping centres in the UK, which operate

at around 20 per cent vacancy, it’s actually doing “all right”.

“[For its size] they should be 95 per cent plus occupancy, but in the context of other shopping centres in the UK, it’s just not as bad.”

Westfield also recently issued a positive first quarter update reporting a 12 per cent hike in footfall across its UK portfolio – as the group said retailers looked to increase their footprint as they focus on the “most productive stores in prime locations”.

In efforts to shift away from a solely retail business, Westfield has also pumped over £700m into developing a range of build-to-rent flats next to its Stratford shopping mall, in a similar move to John Lewis.

Hoyle said that it will be worth “far more” to the business than probably the shopping centre, as it creates a permanent community in the area.

While Westfield appears to be keeping its head above water in London, plans to take its malls to other regions

of London remain in question. In 2021, a £1.4bn scheme to bring its offering to Croydon and revive its town centre with the help of Hammerson was scrapped after it received a number of setbacks including John Lewis pulling out as its anchor tenant. However, after nearly three years of silence, Westfield revealed in April that it had bought Hammerson’s 50 per cent stake in the transformation project noting that it is “very excited about what can be achieved in Croydon”.

Westfield has given up on San Francisco, but there’s little sign of that in London, says Laura McGuire

A 12 per cent hike in footfall last year looks positive

John Lewis writes down London HQ by £15m due to hybrid working

LAURA MCGUIRE

THE JOHN Lewis Partnership (JLP) has slashed the value of its London head office by £15.6m in the latest signal that hybrid working trends continue to hinder the capital’s commercial work space.

It comes as last month the retail group revealed it was ending the lease on its head office in Victoria,

London as it no longer needed such a large space following a surge in homeworking post pandemic.

The troubled retailer, which made a £234m loss last year, also revealed in account filings, first seen by The Times, that it reduced the number of offices it uses at its Bracknell site due to its new ‘blended work’ policy.

“We said more than a year ago that we were moving to a blended working

model across our offices. This means like many businesses, we don’t need as much space now,” a JLP spokesperson said.

“In 2023, we recognised an impairment charge of £15.6m, following the announcement to close seven floors of our London office and to revise the use of our Bracknell office buildings. The impairment is simply down to using less space.”

Frasers snaps up Boohoo stake in investment spree

AUGUST

GRAHAM

THE COMPANY behind Sports Direct has said that it hopes a new stake in Boohoo can lead to collaborations between the fashion brand and Missguided.

Frasers Group said that its new holding in its fellow listed company would allow it to find synergies and make its own brands stronger.

The business, majority owned by Mike Ashley, yesterday revealed that it had taken a five per cent stake in Boohoo a day after purchasing 8.9 per cent of the shares in electricals retailer Currys.

“Boohoo is an attractive proposition to us with its laser focus on young female consumers,” Frasers said in a statement yesterday morning.

“We see potential synergies and an opportunity to strengthen our own brand proposition in collaboration with Boohoo, most obviously with Frasers Group brands I Saw It First and Missguided.”

It added that investments are “a core part” of the

company’s DNA.

“We have a clear strategy to identify opportunities to invest in businesses which complement our existing sport, premium and luxury businesses, or help us to build and further utilise our sectorleading ecosystem.”

It said that the investment in Currys will help it build on its foothold in the electricals industry and said that Currys could also benefit from Frasers’s knowledge of the retail industry.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “Frasers Group is putting its fingers into more retail pies, snapping up slices of companies which have proved unappetising for investors in recent years.

“Boohoo and Currys have struggled with falling sales as the cost of living crisis affects discretionary spending, but Frasers Group clearly sees significant value in both companies, once inflationary winds die down. It also bought up a stake in AO World, the electrical retailer hit by the post-pandemic shifts in spending, which has been showing positive signs”.

Wheels come off for Peloton as UK annual losses widen to £210m

LAURA MCGUIRE

PELOTON’s UK arm has struggled to keep up the momentum of its pandemic success, with the group posting widening losses as sales of the luxury exercise bike fall significantly from their lockdown peak.

In its most recent financial results in the year to June 2022, the American brand’s British division said sales contracted 13 per cent and its losses nearly doubled – reaching £210m

compared to £81m the prior year. However, cost of goods sold increased over 17 per cent, as Peloton splurged on the opening of a permanent London location in Floral Street Covent Garden, which includes three fitness sites.

The news hit the company’s already flailing share price yesterday, falling around five per cent to $8.20 by midafternoon, representing an around 67 per cent drop on the lockdown darling’s IPO price.

Peloton is struggling to maintain its pandemic momentum

Frasers owner Mike Ashley continues to eye growth

LONDON FROM THE AIR

JAMES SILVER

AERIAL photographer Jason Hawkes has been flying over London in helicopters for over 20 years –and in that time he’s marked the city’s extraordinary evolution in the 21st century.

From City skyscrapers to the green grass of beautiful SW19, home to next month’s Wimbledon Championships, Hawkes flies at heights as low as 450ft all the way up to 2,500ft –hanging out the side of AS355 helicopters shooting images and videos for advertising agencies, design agencies and architects.

In a varied career, he has produced over 50 aerial photographic books for publishers such as the BBC, Random House, Dorling Kindersley and Harper Collins, as well as working with a host of multi-national brands and businesses.

£jasonhawkes.com

Canary Wharf glistens in the early morning sunshine, with the City of London in the background

The Gherkin is now dwarfed by newer City arrivals

Wimbledon will be packed with tennis fans next month

The Shard and the City pop out of the early morning fog

So that’s where tube trains go to sleep: the Stratford depot

Jason Hawkes shares some of his favourite aerial photographs of the capital with City A.M.

THE NOTE BOOK

We’re excited for our London expansion

AS I STAND here today, on the brink of Froda’s expansion into the UK market, I can’t help but feel both excited and nostalgic. You see, long before cofounding Froda and embarking on this incredible fintech journey, my first job was working as a barman in London. By bringing Froda’s vision and innovative financing solutions to British entrepreneurs, it feels like I have come full circle and like a homecoming of sorts.

SMEs are the driving force behind the economy, fostering innovation, job creation and economic growth.

SMEs constitute 99 per cent of all European businesses and contribute over half of Europe’s GDP, making them vital in every sector. However, accessing capital for growth can be challenging for them. Traditional banks, with their lengthy processes and rigid criteria, may not be the best fit for the fast-paced and dynamic nature of SMEs.

At Froda, our mission is clear: to revolutionise the banking experience for entrepreneurs and small business owners.

Understanding the challenges faced by SMEs, we’ve developed a digitised lending platform with smart credit-scoring algorithms. This platform offers quick and fair

GROW THROUGH PARTNERSHIPS

financing solutions tailored to each business’s unique needs. By doing this we can be more objective and provide capital for more ideas and the right entrepreneurs, promoting diversity and equality in Europe’s entrepreneurial landscape.

In a time when the economy is facing headwinds and recovering from the pandemic, access to financing is crucial for startups and small businesses to stay afloat and invest in the future.

Froda’s streamlined lending process provides flexible and accessible options that adapt to modern business requirements. We believe that every ambitious entrepreneur deserves the chance to turn their ideas into reality, and we’re here to make that happen.

Entering the UK market, together with our partner Treyd, is a natural step for Froda. The entrepreneurial spirit and vibrant business ecosystem make it an ideal destination for our innovative approach to financing. By introducing our digital lending platform, we aim to bridge this gap and empower UK SMEs with the financial tools they need to thrive. Together, we contribute to diversity and equality in the entrepreneurial landscape.

The fintech landscape in Europe is teeming with opportunities for collaboration and partnership. These alliances have the power to benefit not only the companies involved but also the end customers. By joining forces, businesses can leverage their combined strengths, expertise and innovative solutions to create transformative experiences and the collaborative approach brings better solutions to the customers. Through strategic partnerships, the fintech industry can thrive, driving forward progress and fostering a culture of innovation.

£ Embedded financing is reshaping the fintech landscape by seamlessly integrating financing services into non-financing platforms, allowing businesses to offer their customers flexible financing options, unlocking new growth potential. Through this innovative approach,

Can Labour save onshore wind from Nimbyism?

NICHOLAS EARL

LABOUR’s plans to speed up the UK’s energy transition from fossil fuels, including the revival of onshore wind developments, have been largely welcomed by industry this week, though energy experts warn it will take more than just rhetoric.

Labour leader Keir Starmer this week unveiled the party’s green energy plan, including speeding up the planning process for onshore wind, a new statebacked energy supplier and a national wealth fund to invest in green energy.

The Conservative government has been attempting to balance ramping up cheap, clean power but only where communities are in favour of them.

Last year, just two onshore wind turbines were installed in England, fewer than war-torn Ukraine.

Andy Mayer, energy analyst for free market think tank the Institute of Economic Affairs, welcomed Labour’s push to reform planning laws.

While Mayer criticised Labour’s reliance on subsidies to drive energy policies as “a return to the failed industrial policies of the last century”, he recognised slashing “the time it takes to plan and permitting new energy in-

frastructure will reduce costs” and “ending the government’s obsession with blocking onshore development will increase options available for new supply”.

Nevertheless, challenges remain. One is that Labour may have to go further than they would wish to reduce the risk of minority opposition in local communities dictating energy policy.

This issue has been raised by Adam Bell, head of policy at Stonehaven, who considered Labour’s plan to ease planning laws as “undoubtedly a good thing” but warned this could require reducing access to judicial reviews and scrutiny.

“A big chunk of planning delay is derived from judicial review risk; removing that might mean reducing the right to take decisions to judicial review.”

Trade association Energy UK, which represents the domestic sector, welcomed the focus on community benefits – but warned more than rhetoric was required to meet its energy ambitions.

“This transformation will take a real partnership between communities, governments and industry,” chief executive Emma Pinchbeck said.

companies can enhance the overall customer experience and provide tailored solutions to meet individual needs. This trend not only drives economic growth but also fosters entrepreneurship by giving businesses of all sizes access to the financing they require.

£ Small and mediumsized enterprises (SMEs) comprise 99 per cent of all businesses in the EU and contribute over half of Europe’s GDP. They play a significant role in creating value across various sectors of the

£ Open banking has transformed the financial landscape by allowing consumers and businesses to share their financial data. That’s paved the way for more personalised financial services. It’s no surprise that in a world in which choice is all around us, from what to watch on TV to which takeaway to order, that SMEs are looking for more tailored solutions to their funding needs.

economy. Ensuring equal access to financing for SMEs, comparable to that of larger businesses, is a crucial challenge for the global economy. Achieving this requires collaboration between the private and public sectors.

EU fails to agree energy reforms after coal clash

CITY A.M. REPORTER

EUROPEAN UNION countries have failed to agree on planned new rules for the bloc’s power market, after clashing over a proposal to extend subsidies for coal plants under the reform, and a push to expand state aid for other power plants.

Energy ministers meeting in Luxembourg failed to find a joint stance on the reforms that seek to avoid a repeat of last year’s energy crisis.

The talks had been complicated by a late proposal by Sweden.

Expectations for global consumption have been constrained by slow growth in China

Iran supply gut could weigh down oil prices, experts predict

NICHOLAS EARL

AN UNEXPECTED influx of Iranian oil supplies could help further weigh down prices, which are currently suffering a downturn amid gloomy growth data from China.

Brent Crude slid 1.27 per cent to $75.12 per barrel in yesterday’s trading, while WTI Crude tumbled 2.19 per cent to $70.21 per barrel. Meanwhile, Iranian crude production has risen to its highest levels in five years, with the country’s output rising to 2.87m barrels in May

– around three per cent of global supplies –according to International Energy Agency data.

Craig Erlam, senior markets analyst at OANDA, said: “As we can see from the price currently and the limited impact of Saudi cuts recently, the market is currently well supplied. While some of this may be priced in, depending on volumes it could push the price lower. That said, there is an expectation that the market could move into deficit later in the year, but again additional Iranian supply could alleviate that.”

EU countries’ ambassadors will take up the negotiations, aiming for a deal this month.

Poland, which gets around 70 per cent of its power from coal, could prolong its support scheme for coal plants, potentially until 2028, under the proposal.

Countries including Austria, Belgium, Germany and Luxembourg said the move would undermine Europe’s fight against climate change.

The draft proposal would allow existing capacity mechanisms to temporarily waive a CO2 emissions limit –enabling coal plants to participate –if they fail to attract enough lower-carbon generators, and if the European Commission approved the exemption.

Coal is the most CO2-emitting fossil fuel and scientists say its use must plummet this decade.

Today, the notebook is written by Olle Lundin, co-founder and CEO of Swedish fintech Froda, which is launching in London

CITY DASHBOARD

YOUR ONE-STOP SHOP FOR BROKER VIEWS AND MARKET REPORTS

LONDON REPORT BEST OF THE BROKERS

To appear in Best of the Brokers, email your research to notes@cityam.com

UNCERTAINTY

FTSE weighed down by cautious investors as rate concerns linger

LONDON’sFTSE 100 struggled for gains yesterday as investors took a cautious approach before the Bank of England’s expected 13th straight interest rate rise.

The capital’s premier index shed 0.25 per cent to close at 7,569.30 points, while the domestically-focused mid-cap FTSE 250 index, which is more aligned with the health of the UK economy, slipped 0.57 per cent to 18,746.16 points.

A series of factors are buffeting the UK economy that are knocking sentiment towards London’s top firms.

New numbers out today from the Office for National Statistics are poised to show inflation is still very high, dropping to 8.3 per cent in May from 8.7 per cent in April. Core inflation, which the Bank watches closely, is likely to remain elevated.

“UK-specific factors including Brexit, an open economy and greater reliance on imported energy have been more negative on the inflation front than either Europe or the US,” analysts at Jefferies said.

Richard Hunter, head of markets at Interactive Investor, said London investors took their lead in the morning from a poor trading day in Asia overnight. Wall Street also opened lower, amplifying negativity in the City. A batch of consumer-focused stocks helped hoist the FTSE 100 just about into positive territory in the first couple hours of the day, before interest rate-sensitive companies dragged the index into the red. Natwest dropped nearly three per cent, while a string of other financial firms finished the day near the bed of the FTSE 100. Pound sterling weakened sharply against the US dollar.

Hedge fund titan Man Group “merits a higher rating,” says Peel Hunt. The firm has, over an extended period, grown faster than the UK quoted sector and has aboveaverage assets under management (AUM) growth when compared with peers. Peel Hunt set a target price of 271p, 20 per cent above the share price, and gave Man a “Buy” recommendation.

Summer weather has propped up Next’s performance, acting as a “clear catalyst” for clothing sales, Peel Hunt analysts said. Full price sales were up 9.3 per cent year on year in an unscheduled trading update, well ahead of previous guidance of five per cent. The company is also expecting higher pretax profits for the year, up £40m to £835m. Peel Hunt gave it a “Buy” rating with a target price of 7,000p.

AHEAD “Thursday’s rate rise looks nailed on, but what is beginning to filter through to markets is uncertainty about what comes next. The Chancellor might have ruled out government help for mortgage holders facing a horrifying cliff edge but there’s little doubt that what’s happening in the mortgage market is deeply destabilising to the economy.”

DANNI HEWSON, AJ BELL

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.

JOIN THE CONVERSATION AND BECOME A PART OF ONE OF LONDON’S MOST TRUSTED NEWS SOURCES

EDITED BY SASCHA O’SULLIVAN

We’ve overegged the power of interest rates and now we’re paying the price

Max Rangeley

IT IS never a good sign when bond yields take up an outsized proportion of the news agenda. But in the last three months, they have risen by over 100 basis points and occupied a decent chunk of our collective concerns. This is a strong indicator of risk that has built up in the system, but it is important to understand that, first, much of this is the consequence of years of central bank policies and irresponsible government spending and, second, this build up of risk has been a phenomenon that goes well beyond just the UK.

Earlier this month, I spoke at the European Parliament on the unfolding economic situation around the world.

The fragility in the banking system over the last few weeks has caught many policy-makers by surprise, yet much of what is happening is entirely predictable. In 2018 and 2019 I gave a series of speeches in the European Parliament detailing the consequences of zero percent interest rates—the unparalleled growth in debt and build up of risk in the global financial system that was developing.

For the last forty years, through much of the developed world, each recession has been responded to by central banks setting lower and lower interest rates, thereby creating larger and larger debt bubbles. This is a phe-

nomenon that has taken place across almost all of the developed world. For instance in America—which as the holder (at least for the time being) of the world's reserve currency has special importance—when the bubbles in property and other asset classes burst in the late 1980s, the response from Alan Greenspan was to set interest rates at 3 per cent, the lowest for a generation, and then follow up with several iterations of the so-called "Greenspan Put," thereby creating the Dot Com Bubble.

When the Dot Com Bubble burst in 2000, the response from the Federal Reserve was even lower interest rates,

of 1 per cent, which then created an even larger bubble—the Housing Bubble. When this burst in 2008, the response was the lowest interest rates in history, 0 per cent, with some central banks even setting negative interest rates, for more than a decade. The main consequence of this, far from bringing back prosperity, has been to generate an even larger global debt bubble.

In 2007, global aggregate debt—the total of household, government and corporate debt—was $157tn, already the largest debt bubble in history by some margin. Following the era of zero percent interest rates, this rose to

almost $300tn, practically doubling the size of the bubble since the 2008 financial crisis.

The consequences of artificially low interest rates, however, go well beyond just debt levels. With each phase of central banks' increasingly "stimulatory" policy from the 1980s onwards, the number of zombie companies has increased concomitantly as more of the resources of the economy are diverted to those firms which produce little value but can survive indefinitely on artificially cheap credit.

Last year, the British pension fund system came close to serious difficulties due to so-called Liability Driven Invest-

We can’t base artificial intelligence laws off the risks we only imagine to be real

LAST week, Rishi Sunak said he wants to balance safety and innovation to realise the potential of artificial intelligence. But to sell his vision, he must do more to bring MPs with him.

As we now know, AI holds incredible potential but significant risks. Rishi Sunak mentioned how it is helping people walk again, discover new drugs and detect cancer earlier. For all these benefits, concerns remain.

The investment bank Goldman Sachs reported generative AI could replace 300 million jobs. Matt Clifford, who is helping the Prime Minister set up the AI taskforce, said the technology could “kill many humans” within two years.

Some 350 global AI experts have warned it could lead to the extinction of humanity.

As the doomsaying continues, the cries for “something to be done” intensify. Labour and SNP MPs have called for stronger regulation and a more interventionist approach.

Reflecting this concern, our new research shows that only 6 per cent of

James Boyd-Wallis

MPs believe existing regulators have the necessary skills or expertise to govern AI.

Conservative and Labour MPs share this lack of confidence, with just 7 per cent of Conservatives and 6 of Labour saying that existing regulators have the expertise needed. These findings call into question the AI whitepaper published in March, which recommended a sector-by-sector approach to governance, leaving it to individual regulators to decide what is best.

Our research also shows that only 14 per cent of MPs would prioritise growth and innovation over the safety of citizens and society. Just under a quarter (23 per cent) of MPs under-

stand its implications.

Rishi Sunak wants the UK to be home to a global AI safety watchdog akin to the International Atomic Energy Authority for nuclear fuel, among other measures. But he can’t do any of this if he can’t bring politicians on board.

It is a discussion worth having. The government's approach sits between the EU's more prescriptive and stricter AI Act and the US, which has been very light touch. We need to work out what is safe and not and put guardrails in place for the latter. The goal should be sensible rules that allow flexibility between different industries and uses. For instance, retailers who want AI to help recommend the best outfit need not be regulated like a healthcare provider. Such a middle-ground could help maintain the UK’s position as a global AI leader, but only if the PM resists calls for greater regulation based on assumed risks.

If we are in a rush to regulate, we may jeopardise innovation and the benefits AI can bring. Governments do

not create thoughtful policies in a climate of fear.

So we need a broader discussion about how organisations use AI and the accompanying opportunities and challenges. What does the use of AI facial recognition technology by the police mean for bias and privacy? How can AI help put patients at the centre of the NHS and improve outcomes?

And that debate must involve all stakeholders: MPs, AI firms - both big and small, civil society, academics and those impacted by AI. We must also ensure that regulators have the expertise they need and there are mechanisms to reassess the risks as AI develops. Only through dialogue and debate can Rishi Sunak sell his vision, guard against knee-jerk policymaking and create a vibrant AI sector in the UK. In doing so, we can ensure AI can help us better diagnose and treat diseases, enhance productivity and ultimately improve our lives.

£ James Boyd-Wallis is Co-founder of Appraise Network

ments, but these are just the tip of the iceberg with respect to the risk build up in global bond portfolios. As years of artificially low interest rates incentivised risk and distorted the underlying pricing mechanism of credit, the lowest-quality bonds came to constitute increasing amounts of bond portfolios in pension funds and elsewhere.

In fact, with each phase of the growth of the global debt bubble from the 1980s onwards bond quality has fallen as issuing more debt became the solution to every problem—thereby making the economy more reliant on artificially low interest rates.

The question then remains—how do we extricate ourselves from this quagmire of debt? At least part of the answer will be to take heed of twentieth century economist Friedrich von Hayek, who wrote of the importance of interest rates as a crucial pricing mechanism for the economy. When central banks set interest rates artificially low to "stimulate" the economy, the reality is that they distort the economy, leading to both debt bubbles and distortions to the underlying capital structure of the economy; the economic growth is illusory and fleeting. Unlike previous business cycles from the last hundred years, we now have to unwind an entire generation of everlarger distortions. Now that this iteration of the generational debt bubble is beginning to burst, it is an opportunity to re-examine the role of interest rates in the economy and view them as an important and systemic pricing mechanism rather than a "policy tool" for central bankers.

£ Max Rangeley is the editor of The Cobden Centre

SHAUN OF

Andrew Bailey

THE DEAD Once hopeful candidate for Mayor of London, Shaun Bailey is now facing calls to give up the peerage gifted to him from Boris Johnson. Bailey’s staff were snapped at a ‘jingle and mingle’ Christmas party at Tory HQ during lockdowns and filmed themselves breaking the rules

WE WANT TO HEAR YOUR

LETTERS TO THE EDITOR

Make our MPS work for votes

[Re: I’d love to be an MP, but Britain is still too ashamed of open political ambition, yesterday]

If Adam is after an explanation for the UK's 'doom loop of bad politicians' he should look no further than the first past the post voting system.

This leads to hundreds of MPs being elected to very safe seats, with huge majorities. This in turn fosters

complacency and, on occasions, corruption. A proportional voting system would make MPs work harder and require them to seek broader support. A further bonus would be that PR systems tend to elect MPs who are more representative of the population as a whole. Perhaps Adam would be one of them? I would certainly encourage him to stand. Being an MP is an honourable vocation, the odd rotten apple notwithstanding.

Tom Brake Director of Unlock Democracy and former MP 1997-2019

THE BEGGING BOWL IS OUT Ursula von der Leyen on a €66bn mission

The Bank of England risked our economy by believing a Peter Pan myth on inflation

Paul Ormerod

THE Bank of England has finally accepted that it needs to react to the growing criticism of its failure to either predict or control the persistently high rate of inflation.

In response to demands from the Treasury Committee of the House of Commons, the Bank has decided to commission a broad external review of its “forecasting and related processes during times of significant uncertainty”.

The approach which dominates macroeconomic modelling is known as New Keynesian. It has scarcely been possible to be appointed to the MPC over the past few years without subscribing to its precepts. But the current inflationary crisis is by no means the first time that this conventional wisdom in macroeconomics has come unstuck.

In August 2008, for example, Olivier Blanchard, then chief economist of the IMF, published a paper for the Massachusetts Institute of Technology (MIT)

EXPLAINER-IN-BRIEF: A WAR ON... ON-SITE DRUGS TESTING AT FESTIVALS

Glastonbury kicks off today, but festivals this summer will be different from previous years: there won’t be any drug testing. The Home Office has decided companies that do drug tests at festivals need a special licence, taking the sector by surprise. Drug testing at festivals is paid by the organisers, who collaborate with the police and local authorities to try to reduce potential harm. On-site testing takes place on the drugs the police have found on people or left in amnesty bins.

When the scientists running the tests identify something that’s stronger than usual or not being sold as what it is, they can send out an alarm on social media. Others at the festival are then aware that a dangerous batch is doing the rounds. Different festivals have been doing this since 2014, but this year the Home Office, just days before the season started, changed its mind. It can take more than three months to receive a licence, so no one will be able to have one in time this summer.

entitled “The state of macro”. He concluded “a largely shared vision both of fluctuations and of methodology has emerged...the state of macro is good.”

Three weeks later, Lehman Brothers collapsed.

The New Keynesian approach has a wide range of variants, all of which share a high level of mathematical sophistication. They also share two fundamental economic features. First, in essence, the quantity of money in circulation does not really matter as far as inflation is concerned.

Last June, for example, Huw Pill, the Bank’s chief economist, felt able to dismiss the concerns of monetarists. He wrote in his paper: “Some monetarists expressed concern that the expansion of central bank balance sheets via QE

Investors expect inflation to fall to 8.3 per cent in fresh figures out today

during the financial crisis would trigger inflation. This fear proved misfounded”.

To be fair to Pill, overall his paper is very thoughtful. But on the question of inflation, in June 2022 the Bank’s chief economist argued that there was no need to worry that the rapid expansion which had taken place in the money supply would cause inflation.

The second common feature of New Keynesian models is rather intriguing. They offer what is basically a Peter Pan theory of inflation. If we all believe in fairies, Tinkerbell will live. And if we all believe in the Bank’s New Keynesian model, inflation will never get out of control.

According to these types of models, inflation in the current period depends upon the current level of output and the expectation of inflation in the future. So if people expect inflation to rise, it will actually go up in the current period. But it is controlled by a neat trick.

The expectation of future inflation is influenced by the decisions of the cen-

tral bank on interest rates. The bank will raise interest rates if either output is above its trend or inflation is above the bank’s target inflation rate.

If inflation is expected to be above target, the Bank will be expected to raise its interest rate in the next period. This will reduce output, which in turn will reduce inflation. And if inflation in future is expected to be lower, inflation in the current period will also be lower.

This line of reasoning is why the Bank of England in recent years has placed so much emphasis on “anchoring” expectations of inflation. It may seem esoteric, but it has been of great practical significance.

But the whole approach has a fundamental flaw. For it to work, we all have to believe that the Bank’s model is the correct description of the economy. It may well be that many people believe in Tinkerbell. But it has become apparent that very few believe in the Governor of the Bank of England.

£ Paul Ormerod is an author and economist for Volterra Partners LLP

In June 2022, Huw Pill argued there was no need to worry about the risk of inflation

European Commission President Ursula von der Leyen has been promoted to fundraiser, as she tries to convince frugal European nations to help cover the rising cost of interest, the cost of increased migration and the Ukraine war.

FORGET MARVEL:HERE’S THE BARBIE UNIVERSE

Ynon Kreiz is the CEO of a $6bn company, responsible for some of the world’s most recognisable brands, and I’m pressing him on whether or not he has a favourite Barbie.

“I wish I had one so I can give you a straight answer,” he says after the third time I ask him. “But I am just inspired by the breadth and variety and diversity of our product. There is a Barbie for everybody.”

To be fair, Kreiz, the man in charge of toy company Mattel, probably has little time to play with dolls. Since he joined from Endemol in 2018 he has overhauled the company, slashing headcount and repositioning the firm from “a manufacturing company that makes things to an IP company that manages franchises”.

He has also overseen Barbie’s rehabilitation, moving past the idea that she represented sexist and outdated ideals and repositioning her as a modern, inclusive 21st century woman.

This new direction is about to hit a major milestone with the release next month of the company’s first movie, Barbie. Starring Margot Robbie and Ryan Gosling, and directed by Greta Gerwig, it promises to be a knowing riff on pop culture painted on a canvas of powder pink and baby blue.

It’s a gloriously absurd confluence of talent, bringing together one of the most respected indie directors in Hollywood and two of its biggest stars. Had you told me a year ago that, as a 40-year-old man, one of my most anticipated movies of the summer would be about Barbie, I doubt I would have believed you – and yet here we are.

I meet Kreiz in the bar of a Covent Garden hotel during his whistle stop trip to London, his former home. Wearing a dark suit and white shirt, he’s slim and angular, and could comfortably pass for a decade younger than his 58 years. He’s telling me in his thick Israeli accent that he wanted to make a Barbie film from the day he joined Mattel.

“Within six weeks of joining the company I met with Margot. We talked about how to create something special. I saw her as the ultimate, perfect person to play Barbie and said she should come in as a producer. We took it to Warner Brothers together. She has been involved with the creative process from the beginning. Once she got involved, the project took shape.

“Going live action was a big choice. Making an animated movie is a lot safer but making it live action puts Barbie in a more humanised environment.

“We both wanted someone with a dif-

By Steve Dinneen

ferent perspective to take the creative lead and Greta was an incredible choice to write it alongside Noah Baumbach, and the hope was that she would also direct, which she did.”

There is a reason the Barbie movie has generated so much hype: films like this simply don’t happen. IP holders are cautious and top directors demand too much control. This is Barbie we’re talking about, after all. So how much control did Mattel yield?

“We were very involved from the beginning. But the nature of this project was about trusting Greta, asking her to be original and creative. We wanted her to interpret Barbie in her own way.”

So what was it like chatting to a top director like Gerwig about making a movie about a doll?

“We had many conversations about Barbie and the ethos of the brand. Barbie is a pop culture icon. She is much more than the doll – Barbie is a concept. She is a flag carrier for diversity and inclusivity.

People have an emotional connection with Barbie. She evolves and transforms and this movie will recontextualise what people think of her again.”

The film is a “big, bold comedy with heart”, according to Kreiz, bringing together various facets of pop culture, including fashion, visual arts and music (Lizzo, Nicki Minaj, Karol G and K-pop band Fifty Fifty are all attached).

Whether you’re a young girl, a Barbieloving adult or a journalist approaching middle age, you will doubtless have noticed the memes and Instagram filters being shared across social media.

“What you see right now in terms of the excitement and anticipation is mostly organic. There hasn’t been active marketing with billboards and buses, that hasn’t even started…. By 21 July it will be very hard to live on this planet and not know this movie is coming out.”

And Barbie is just the start – Kreiz sees a future for Mattel with multiple franchises all existing alongside the toy busi-

ness. Indeed, there are already 14 films in development, including Hot Wheels, Fisher-Price, Scrabble, Thomas & Friends, Uno, Masters of the Universe and Monster High. Mattel has also launched a Hot Wheels show at primetime on NBC and there’s a show on design network HGTV about the Barbie Dreamhouse.

Some of these titles give me unpleasant flashbacks to the 2012 movie adaptation of the board game Battleship – how does one go about creating an Uno franchise? – but Kreiz certainly has people’s attention. Unsurprisingly, Marvel is high on his list of inspirations.

“Marvel used to be a comic book publisher until one movie changed people’s perspective. Then Disney did an amazing job in reimagining and recontextualising it and making it current to today’s consumers. This is what we were trying to achieve – our brands are already timeless. The idea is to make them also timely and relevant to today’s consumers through other forms of media and enter-

tainment. Today’s world is all about big brands and big franchises that rise above the rest in a crowded marketplace.”

This is not the start of a shift away from manufacturing toys, insists Kreiz, and nor is it an exercise in simply flogging more dolls – he envisions a world in which toys and movies walk hand in hand.

“We didn’t break apart the company, what we did was restructure and transform the core business – strengthen it, restore profitability, regain top line growth, gain market share – and that gave us the opportunity to grow the entertainment side. We didn’t do it at the expense of the toy side, it’s the opposite – the toy business is good, it’s a great platform to launch an entertainment strategy.”

Mattel is in a fairly unique position, he says, with customers having grown up with the brand from virtually the day they were born.

“Toys have a very high level of emotional relationship with the consumer. When kids get a toy they love they hug it, they go to bed with it, so the emotional relationship is already very strong – and that’s one of the hardest things to achieve. We have brands that have very, very high awareness, and you can leverage that to enter other domains.

“We own one of the strongest children and family entertainment portfolios in the world. The Barbie movie has been 64 years in the making. But we’re not entering film and TV purely to market toys. The mandate was: let’s make quality content that people want to watch. First and foremost, focus on quality. If we do that, well, good things will happen. And then

we will also sell more toys.”

He won’t be drawn on how big a portion of the business the franchises may one day represent, but points to strong fundamentals in the toy-making business, with Mattel selling strongly to both kids and adults who still feel like kids (a collection of Barbies made in collaboration with American artist Mark Ryden sell on the Mattel website for $500, which would be a lot of pocket money).

I ask whether sitting beside Robbie, Gosling and Gerwig next month at the premier of the movie he has willed into existence will be his proudest moment but, just like refusing to pick a favourite Barbie, Kreiz circles back to business.

“It’s clearly an important juncture. But we’ve already had key junctures of the company. Becoming investment grade again has been an important moment. This is the life of a CEO, you have to look at the canvas of all of it.”

£ The Barbie movie is out on 21 July

Today’s world is all about big brands and big franchises that rise above the rest in a crowded marketplace

I saw Margot Robbie as the ultimate, perfect person to play Barbie. She has been involved from the beginning

Top: Mattel CEO Ynon Kreiz at the company’s LA headquarters; Left: Ryan Gosling and Margot Robbie in the upcoming Barbie film; Inset: A new Barbie doll

Mattel CEO Ynon Kreiz on making the year’s most bonkers film, the future of the company, and not having a favourite Barbie.

GLASTO: KEEPING THE CHURCHILL LEGACY ALIVE

Forget the music, Adam Bloodworth goes behind the scenes at Glastonbury’s Theatre & Circus fields

There may be throngs of paparazzi waiting for Elton John at this year’s Glastonbury, but if you fancy experiencing his heights of fame yourself, head to the festival’s Theatre & Circus fields, where a roaming group of photographers may chase you for your picture.

You may also pass frozen Everest summiters, macabre clowns and the ‘Moaning Lisa’ –a portrait with legs! –in this carnival-inspired patch of Worthy Farm, where cabaret plays until the small hours for those not interested in dancing to big-name DJs.

During the daytime, an Outdoor Amphitheater stage and aerial rigs host theatre and circus acts with some of the most arrestingly weird shows. You could pull up a pew, buy a pint, and spend all afternoon here (I certainly do; the Theatre & Circus fields are Glastonbury’s best-kept secret).

The Fields were the passion project of Arabella Churchill, Winston’s granddaughter, who helped found Glastonbury festival 50 years ago, convincing Michael Eavis that hosting hundreds of thousands on his farm wasn’t a mad idea but one that would foster creative thinking and community spirit.

In 2012 Jade Dunbar, manager of the Circus Big Top, set up the Glastonbury Arts Commissions to provide funding, support and direction to rising artists who could use the festival –and its big audiences –to hone their craft. The Commissions was a project Arabellaknown as Bella to those who worked with her, until her passing in 2007 - was incredibly passionate about.

There are nine theatre and circus acts given help by the Glastonbury Arts Commissions for 2023, the highest number the festival has ever had. The model means that Glastonbury Festival

commits to contributing the same amount of money to creatives as the Arts Council does.

“Arabella was like the First Lady of Glastonbury,” says Jade Dunbar, stage manager at Circus Big Top and Glastonbury Arts Commission mentor, who worked with Bella.

In the noughties, Churchill and Dunbar devised the idea of the Glastonbury Arts Commissions, before Churchill passed away from cancer in 2007. “The conversation was really about how we can develop and nurture and use Glastonbury to bring new works forward,” says Dunbar. “Bella was always one for supporting the Underdog but also supporting new work. Michael Eavis has also always very much supported allowing creativity to blossom.”

“Having the Glastonbury Arts Commission’s support has helped rehearsals, writing and getting artists on

board,” says Rupert Oldridge of Beatbox Collective, one of the this year’s commissions, who are staging a mass singa-long in the Theatre & Circus fields.

“Its incredibly helpful having an experienced team guide us to the right expectations and planning for how to prepare. The rest is up to us and whoever may turn up!”

Ajay Chhabra, co artistic director off Nutkhut, a South Asian multidisciplinary arts company, says the “stifling current climate” of the arts and arts funding means there are not enough opportunities for creatives to freely experiment.

“Opportunities to sometimes fail and then to pick yourself up are missing,” he says. “This opportunity allows for openness in thought, and allows for artists like us, from all different parts of the world, with multi-heritage, often trilingual backgrounds, to share and create

in a supportive and non-judgmental atmosphere.”

Chhabra remembers working with the “kind and generous” Bella Churchill in the noughties. “At our first Glastonbury she encouraged Michael Evis and family to come and see our act,” he remembers. “That was nerve racking, but we are so happy it happened. We believe in family and Glastonbury is one special family.”

These days, Bella’s widower Haggis McLeod, a world-famous juggler, runs the Theatre & Circus fields alongside his daughter Jessica Churchill-McLeod. There are hundreds of acts in both indoor and outdoor venues and the Theatre & Circus arena is one of the few areas of the festival that runs full programming for five days, from Thursday through to Sunday.

Below are three of the Glastonbury Arts Commissions to catch.

GOING TO GLASTO? DON’T MISS THESE ALTERNATIVE ACTS AWAY FROM THE MAIN STAGE

BEATBOX COLLECTIVE

On Sunday on the Sensation Seekers stage in the Theatre & Circus fields Beatbox Collective will be getting festivalgoers involved in creating “the biggest body of voice Glastonbury has heard.” The group are telling people to just turn up and the rest will fall into place. “Learn a new skill that you can take anywhere. It just requires the voice and the imagination,” they say. The Collective are aiming to get more “recognition for beatboxing as an art form, as something accessible for everyone to join. We believe every sound is a good sound and deserves a platform to express it. What better place to do it than Glastonbury festival.”

Theatre troupe Scary Little Girls promise a potted history of pockets with their show Pockets of Power, which incorporates song, magic and comedy. There’s a late-night version in Theatre & Circus’ Mavericks venue too. “We’ve got some of the most stunning costumes and daftest props –you just need to find a corner of a field for a final dress run!” says artistic director Rebecca Mordan. “It’ll be a delight in the sun, but more challenging if it rains. We are really excited to be bringing the story of radical clothing invention, feminist textiles and the power of pockets to the world’s finest festival.”

VICTORIA GUGENHEIM

Award-winning body painter, fine artist, activist and educator

Victoria Gugenheim has appeared on Channel 4, in an exhibition at the Science Museum and even worked on the make-up in the most recent James Bond film, No Time To Die. At Glastonbury she will create a new immersive piece of art, creating live body art, with poetry readings. “I’m feeling electric about it,” Gugenheim says. “Without the Glastonbury Arts Commision, The Great Somatic Poetry Bodyart Experience would not have been created. It’s vital for artists. Vital for the lifeblood of the Glastonbury arts community.”

POCKETS OF POWER

THE PUNTER

Bill Esdaile previews day two of Royal Ascot

Chesspiece looks the right move in competitive Vase

WHILE it occupies a later position on today’s card than in the last few seasons, the Group Two Queen’s Vase (5:35pm) looks a contest well worth waiting for.

A field of 14 lightly-raced individuals are set to go to post for a race that often comes down to staying potential, as has been proved in recent seasons with several winners of this contest going on to triumph in the St Leger in September.

Roger Varian’s Eldar Eldarov managed that feat last season, but before that it was largely the preserve of Aidan O’Brien-trained runners, namely Kew Gardens and Leading Light. Indeed, the master of Ballydoyle has a superb record in this race, winning it

five times in the last 10 years, and that entitles his runner, Peking Opera, to plenty of respect.

He won well at Naas in a Listed race on his reappearance and should stay all day, but I’ll be looking elsewhere on this occasion.

In a race that can get tactical, the one I like is CHESSPIECE, at around 7/1 eachway with Star Sports.

Simon & Ed Crisford’s runner was a good winner on debut at Newcastle last November, beating a fair yardstick in Hadrianus, who has gone on to advertise the form well this season.

Things didn’t quite go to plan on reappearance, when sent off the 5/2 second favourite for a competitive small-field novice at Newbury over 10 furlongs.

He always looked to be struggling to hit top gear in soft ground that day, and while he stayed on for third, the winner Military Order wasn’t for catching. Stepped up to 1m4f at York last month, he posted a much-improved effort, coming from off the pace to stay on well and win in a contest that is sure to throw up future winners. That indicated to me that he’ll handle this 1m6f trip, and clearly Godolphin thought so too, as the boys in blue have purchased him ahead of this meeting. If taking another step forward from last time, he should hold a strong chance. Of the others, Gregory was impressive at Goodwood last time, but is far too short for me at around 7/4, while Circle Of Fire probably has a bit to find on form.

Today’s card begins with another of Ascot’s famous sprint contests, the Group Two Queen Mary Stakes (2:30pm) over the flying five furlongs.

This isn’t a contest to be too dogmatic about, with 28 two-year-old fillies set to take their chance and I’m happy to play two each-way.

Karl Burke won this race last year with a classy sort in Dramatised and given the strength of his juveniles this season, there’s plenty to recommend

BEAUTIFUL DIAMOND

She looked a filly with a bright future when winning on debut at Nottingham, and while she might not be the biggest price, she’s well worth siding with at around 4/1, with some firms paying five places.

At bigger prices – around 25/1 – look to the Andrew Balding-trained FLORA OF BERMUDA, who seems certain to appreciate the blistering early gallop they usually go in this contest.

She’s still a maiden after two starts but appeared unlucky when never getting the splits in the Hilary Needler at Beverley when last seen. She finished with a late rattle there, and if she can do so again, she could well pick up the leaders at the finish.

POINTERS

Beautiful Diamond e/w 2.30pm Royal Ascot Flora Of Bermuda e/w 2.30pm Royal Ascot Chesspiece e/w 5.35pm Royal Ascot

Haynes looks set to make a real Impact with Maximum

ANEAR full-size field for the Listed Windsor Castle Stakes (6.10pm) over five furlongs will make for intriguing watching.

Over half of the 26 two-year-olds come here with a win on their CV already, and the likes of Charlie Johnston’s Barnwell Boy and Aidan O’Brien’s Johannes Brahms make appeal, both having won their

debuts and coming from top yards that are in good form.

Perhaps slightly underestimated, though, and currently sitting third in the market at around 7/1, is Alice Haynes’ MAXIMUM IMPACT

This colt, a son of Havana Grey, is now two from two, which includes a taking victory at Ascot in a conditions race over this trip last month.

He is partnered by Kevin Stott once more, who, having tallied up over 60 wins this year so far, is experiencing a real purple patch since teaming up with Amo Racing as retained rider. Haynes, too, is operating at a serious level this season and is doing especially well with her two-year-olds on turf, with a 38 percent strike rate from 21 runs. Maximum Impact has proven to be

versatile ground-wise, with his wins coming in both heavy and good ground conditions, so whatever the weather does he is unlikely to be presented with a problem at Royal Ascot this week.

The only thing that may disadvantage him is a slightly awkward draw in 13. With the field as large as it is, the bias will likely be with the low or high numbers on either side of the

track, but, provided he breaks quickly and finds a good position, he should be able to overcome any problems caused by the draw.

POINTERS

Maximum Impact e/w 6.10pm Royal Ascot

Godolphin-retained rider James Doyle will partner Chesspiece in the Queen’s Vase

THE PUNTER

Bill Esdaile previews day two of Royal Ascot

My fancy can keep Luxembourg at Bay in Prince Of Wales

WITH just six runners going to post for the Group One Prince Of Wales’s Stakes (4:20pm), we could be set for a very tactical 10 furlongs.

Ryan Moore will be sensing a soft lead aboard Luxembourg, who shares the head of the betting with Adayar at 9/4, and if he’s not made to work for it then today’s feature race could well head back to Ballydoyle.

Moore’s mount, who didn’t have to pass a single rival to land the Tattersalls Gold Cup last time out, looks like adopting similar tactics once again, particularly given the small field size.

Luxembourg may well get the run of the race, but it’s not often that

these top Group Ones at Royal Ascot are won quite as softly as his victory at the Curragh was.

Bay Bridge chased him home that day, and there’s no doubt that Moore benefitted from dictating the pace aboard the winner, but the runner-up could have got closer if good enough.

Having finished second in this race 12 months ago Bay Bridge has to be taken seriously, and I do think he can be in the shake-up, but he’ll probably just come up short once again.

With the race unlikely to provide much of a stamina test, 2021 Derby and King George double winner Adayar is passed over at shortish odds, and the preference is for MY PROSPERO

The key to this lightly-raced four-year-

old is he’s very straightforward. He’ll likely race up with whatever sort of pace is set, applying enough pressure to make sure it’s not a dawdle, and as a horse that finished third over a mile in last year’s St James’s Palace Stakes, he’s clearly got a decent finishing kick too.

He made an encouraging reappearance when fourth in the Lockinge, a run which advertised his potential to be top class over 1m2f this season having stayed on again after getting outpaced.

Though Adayar, Luxembourg and also Bay Bridge all have Group One prizes on their resumés, My Prospero, who’s yet to win at the highest level, has a few less miles on the clock

and looks like a horse that can really shine in his four-year-old campaign. There really isn’t too much between the first four in the betting, but My Prospero is less exposed, straightforward when it comes to tactics and, crucially, is a nice price at 7/2 with Star Sports.

Mostahdaf wouldn’t be a crazy selection at around the 20/1 mark. He’s shown his liking for this trip having blitzed his rivals by seven lengths in the 1m2½f Group Three Neom Turf Cup on Saudi Cup Night back in February.

His fourth-placed effort in a strong renewal of the Group One Dubai Sheema Classic wasn’t to be sniffed at and, after a couple of months to

freshen up, he could run well again back in trip.

As for the American raider, Classic Causeway, he needs to find plenty on official ratings, albeit international form is tricky to stack up.

He’s a Group One winner in his own right, beating a decent yardstick, Nations Pride, in the Belmont Derby last summer, but his form has been less than impressive since and taking on Europe’s premier middle-distance turf horses is likely to prove too big a task.

POINTERS

My Prospero 4.20pm Royal Ascot

Yer the one that I want in the Kensington Palace Stakes

AFULL field of 20 are set to go to post for the Kensington Palace Fillies’ Handicap (3.05pm) and it looks a wide-open contest.

Tamarama, ridden by Frankie Dettori, is bound to be popular after her good win at Kempton last time, though this looks a deeper race and she’s gone up five pounds in the handicap.

She has to be feared, but I’m keen

on two against her starting with YERWANTHERE

I’m a big fan of Joseph O’Brien as a trainer and I think he could have a very well-handicapped horse on his hands here.

His filly won both her starts as a two-year-old and while she finished seventh of 11 in Listed company at Naas last time, she was a lot better than the bare result as she was

denied a clear run. She remains on the same mark following that unlucky run, meaning she’s only four pounds higher than when she won a Dundalk handicap last season, and that looked a very good run in itself given it’s produced four subsequent winners.

Aussie-based superstar rider James McDonald has been booked and I expect a big run at odds of

COME AND SEE US ON CURZON STREET

We have recently opened our newest, luxury off-course betting shop on London’s Curzon Street, in the heart of Mayfair. We look forward to welcoming you!

36 Curzon Street, Mayfair, London W1J 7TU

9/2 with Star Sports. This is a deep race and I want to have two irons in the fire, so I’ll throw a few quid each-way at TARRABB for Owen Burrows.

She didn’t run at two but enjoyed a good campaign last year, winning three times, with her victory at Haydock in August the one that really caught the eye.

She beat Queen Aminatu there,

and she is now rated 107 having been victorious at Listed level since, so if Tarrabb can repeat that form here, she’s a big player at 10/1.

POINTERS

Yerwanthere e/w 3.05pm Royal Ascot Tarrabb e/w 3.05pm Royal Ascot

My Prospero (yellow silks) finished a close third in the St James’s Palace Stakes last year

THE PUNTER

Bill Esdaile previews day two of Royal Ascot Don’t miss another stop on Frankie’s Prosperous Voyage

THERE are loads of potential stories involving Frankie Dettori this week, but the charismatic Italian would love nothing more than taking out a big race or two for his mates.

In this afternoon’s Group Two Duke Of Cambridge Stakes (3.40pm), he climbs back aboard PROSPEROUS VOYAGE who is jointly owned by his friends Andrew Rosen and Marc Chan.

Trained by Ralph Beckett, the fouryear-old daughter of Zoffany gave Dettori a memorable Derby Day success when landing the Group Three Princess Elizabeth Stakes earlier this month.

That was only her third career success, but her second came at the top level last July when beating Dettori and Inspiral in the Group One Fal-

mouth Stakes at Newmarket.

A 16/1 shot that day, she caused one of the biggest shocks of the season with Inspiral going off at 1/7.

Her reappearance in the Dahlia Stakes at Newmarket was disappointing, but the combination of soft ground and an extra furlong proved too much for her. At around the 11/4 mark, she looks fair value to nudge Dettori closer to 80 Royal Ascot winners.

She is much more at home on a quick surface and while 10mm of rain hit Ascot overnight on Monday, a dry day is forecast and conditions are likely to be pretty much perfect by 3.40pm.

Jumbly looks like going off favourite on her second start for Joseph O’Brien after winning a Group Three at Ascot for Harry & Roger Charlton last summer.

She ran well at the Curragh last month to finish second to Just Beautiful in a Group Two, but she still has seven pounds to find on ratings with Prosperous Voyage.

The interesting contender from an each-way perspective is RANDOM HARVEST who was second to my main selection in the aforementioned Princess Elizabeth Stakes at Epsom. While it’s fair to say she had the run of the race, she still had to concede three pounds to Prosperous Voyage and was only beaten less than a length at the line, so it was a fine run.

She has run three times at Ascot and has finished first, second and third, albeit all of those efforts were in handicap company.

However, as big as 25/1 with some

bookmakers, she looks overpriced and can run well for Ed Walker and Saffie Osborne.

The race has a nice shape to it from a World Pool Quinella perspective where you have to pick two to finish first and second in either order.

I would throw in Prosperous Voyage and Random Harvest, but I’d also add in Rogue Millennium who is a 9/1 shot in the fixed odds markets.

She ran a fine race to be second in the Group Two Middleton Stakes at York last month, battling it out against Free Wind.

This will be her first start at a mile, but if they go hard she’s the type of filly who could pick up the pieces in the closing stages.

It’s an interesting move by connec-

tions to drop her back to this distance and I certainly wouldn’t rule her out.

Of the others, Grande Dame has to be of interest for the Gosden yard who have won two of the last three runnings of this race.

She won at Ascot on debut in April 2022 and was then too keen when taking on stablemate Inspiral in the Coronation Stakes at the Royal meeting last year.

POINTERS Prosperous Voyage 3.40pm Royal Ascot Random Harvest e/w 3.40pm Royal Ascot Prosperous Voyage, Random Harvest, Rogue Millennium (World Pool Quinella) 3.40pm Royal Ascot

Intellogent play won’t leave you feeling Blue in Hunt Cup

FOR MANY, the Royal Hunt Cup (5:00pm) is one of the highlights of the week at Royal Ascot.

It’s a contest where established handicappers meet improving youngsters on the straight mile course at Ascot.

A full field of 30 will be sent on their way at 5:00pm today and it could be profitable to stick with experience by backing INTELLOGENT

at around 8/1 with some firms. He’s a horse who is looking to return to the winners’ enclosure for the first time in over two years but ran several good races last year and judging by his two starts this season, he could be about to come to the boil.

Jane Chapple-Hyam’s eight-year-old was a close second in last year’s renewal and races off a one-pound lower mark this time around with

James Doyle booked again to do the steering, making his chance obvious.

At a bigger price of 12/1 with Star Sports, the improving BLUE FOR YOU looks like an interesting bet returning to a quicker surface.

Although he has failed to lay a glove on his rivals in two previous starts at the Berkshire track, he was very impressive when winning the Clipper Logistics Handicap at York

last August on good-to-firm ground.

He shaped well when finishing fifth on his reappearance at York just over a month ago, so will be fit from that run out and he still looks feasibly treated for the David O’Meara team.

With World Pool in operation for every race at Royal Ascot this week, I will be playing both of these in a Quinella alongside Ghaly, Charlie

Appleby’s sole representative, who beat Blue For You back in July 2022.

POINTERS

e/w 5.00pm Royal Ascot Blue For You e/w 5.00pm Royal Ascot Intellogent, Blue For You, Ghaly (World Pool Quinella) 5.00pm Royal Ascot

Prosperous Voyage and Frankie Dettori winning at Epsom earlier this month

Is Trent answer to England’s midfield riddle?

VALUABLElessons are thin on the ground in Euro 2024 qualifying — especially when, as in England’s case over the past few days, your opponents are ranked 60 and 167 places below you in Fifa’s world rankings.

But one conclusion leapt out of Monday’s 7-0 rout of North Macedonia and the 4-0 stroll in Malta last week: Trent Alexander-Arnold’s blossoming as an effective deep playmaking option on the international stage.

The Liverpool hybrid right-back-midfielder thrived in a central role that allowed him to receive the ball from defenders and use his glorious range of passing to pick holes in bthe opposition.

Shaping like a young Andrea Pirlo,

Gareth Southgate deserves credit for finding the right role for the talented Alexander-Arnold, writes Frank Dalleres

the languid Alexander-Arnold’s highlight was a gorgeous first-time sweep over the North Macedonia left-back that sent Bukayo Saka in behind to smash the pick of his hat-trick. In doing so he provided the clearest evidence yet that Gareth Southgate and his coaching team may have solved the riddle of how to tease out the best parts of his game in an England shirt.

For this Southgate deserves great credit. The England manager has taken pelters from Merseyside and beyond for preferring Kyle Walker and

Kieran Trippier at right-back, where he has an embarrassment of riches.

WEAPON Southgate stuck to his guns admirably, even when it only brought more criticism, but has also shown the flexibility to find a role for Alexander-Arnold without compromising his selection in defence. He might also

have found a potent additional weapon to add to England’s already-stocked artillery.

Central midfield has long been pinpointed as an Achilles heel under Southgate, the area where England, for all their attacking options, have been found wanting in their biggest games,

against Croatia and Italy in particular. Alexander-Arnold roaming central areas to spray passes and pick throughballs — as he has been for some months under Jurgen Klopp, who deserves praise for converting him — can help to solve that problem.

It’s not a perfect solution; one of England’s chief issues is their struggle to retain the ball and control the tempo when leading against quality opponents, and that is not what AlexanderArnold is best at.

But credit where it’s due: the 24-yearold has played his way into Southgate’s first XI thoughts with two excellent displays, and the manager has shown again that his considered approach is the right one to keep fine-tuning his England side.

RUGBY UNION

CONTINUED FROM BACK PAGE

European finals and describing the inclusion of the Cheetahs last year –who played their home games in Italy – as a dream for the South African side.

He said: “Everyone in Georgian Rugby supports more promotion and development of rugby in general and if the organisers of this tournament consider accepting different teams, of course we welcome it. The creation of Black Lion gave us a tangible result [victories]. [It] was created two years ago and it has already brought such a great result.”

This comes as the demise of three English Premiership clubs has left two free spots in the European Challenge Cup – last year the one free spot went to South African side the Cheetahs – and as rumours begin to circulate around a new global calendar which would shun Georgia out of regular matches against Tier One teams until 2030.

“We managed to beat two Tier One teams in the last year,” Maisashvili adds “One at home [28-19 against Italy] and one away in Wales [12-13]. Therefore I think that we really

The Premier League have blocked a potential deal with Paramount Plus

mount Plus. Here we explain why the agreement was not allowed, why this situation isn’t unique to Chelsea or the top division of English football, and what it means for the club’s search for a new sponsor.

WHY CHELSEA SPONSOR DEAL GOT THE RED CARD Q&A

deals will contain extensive provisions designed to preserve the integrity of the rights acquired including restrictions on ‘ambush marketing’ and the exposure of any competitor.

WHY WAS CHELSEA’S PARAMOUNT PLUS DEAL BLOCKED?

The first thing to make clear is that the Premier League did not have a decision to make – such agreements are simply prohibited by their rules.

All clubs in the division sign up to a Deed of Licence, which covers a range of matters relating to broadcasters and media. This contract is confidential so the exact wording is not known, but Premier League sources confirmed that Chelsea’s proposed deal with Paramount Plus was always going to infringe it.

For context, it’s worth remembering

that the Premier League’s chief source of income is the sale of its media rights to domestic and overseas broadcasters, so it is logical that there would be some protections for those important rights holders.

“The Premier League is a company limited by shares as each club is a shareholder and bound by the rules,” says Stephen Taylor Heath, head of sports law at JMW Solicitors.

“A further layer might be what is being referred to as the ‘Deed of Licence’ between the Premier League and the clubs and this is ultimately a legally binding agreement and a licence which sets out the legal basis on which one party’s legal rights may be utilised by another party.

“It is anticipated the broadcaster

“I would anticipate that Premier League clubs will be obliged to collectively adhere to that contract as if they were each a party to it.”

HAS THIS SITUATION ARISEN BEFORE?

While it is not known to what degree other clubs might have explored similar deals, the fact that none has another media company as their shirt sponsor tells its own story. And similar rules apply elsewhere, says Taylor Heath. “This framework is not unique to the Premier League as broadcast partners of several sporting events will impose restrictions on the sporting governing bodies and event organisers with regards to exposure of other broadcasters.”

SO WHAT NOW FOR CHELSEA?

Blues chiefs have been searching for a

new front-of-shirt sponsor since mobile network Three decided not to renew its £40m-a-year deal, which expired at the end of the season. Their task has not been made easier by the team’s failure to qualify for European competition, robbing it of valuable international exposure, next term.

Having failed to land the Paramount Plus deal, Chelsea is now in talks with online cryptocurrency casino Stake.com.

The company appeared on the front of Everton’s shirts last season and has previously partnered with Watford when they were in the top flight.

But it has caused controversy due to the collective pledge from Premier League clubs to phase out gambling sponsors by 2026, and the Chelsea Supporters’ Trust has voiced its opposition to the mooted deal.

“The Chelsea Supporters’ Trust does not believe that it is in the best interests of our members for Chelsea Football Club to associate with an online casino and betting company as the primary shirt sponsor,” it said.

deserve that Six Nations give us a chance to participate in some way –at least we deserve to have more opportunities to play against Tier One teams.”

Tkemaladze agrees. “The fact that we have won Rugby Europe [second tier Six Nations with no promotion] 15 times. We contribute a lot to European emerging countries,” he says. “With Italy and Wales – as well as at age level [where Georgia recently beat England] – Georgian rugby has got several victories.

“I think we’ve clearly shown that we are important members of European rugby. Whether we deserve the place or not is up to the organisers. Our goal is to use every opportunity we could get, including the Six Nations… we are doing everything to gain a place in high quality competitions. Rugby here [Georgia] is a big economy, it is a huge commercialisation opportunity, and the Six Nations is definitely the best tournament to showcase that.”

Central midfield has been a recent Achilles Heel

Number of times Georgia have won the Rugby Europe championship

SPORT

OF PARAMOUNT IMPORTANCE? Why Chelsea’s sponsorship deal got given the red card

Georgians state case for role in European rugby

MATT HARDY

LEADINGGeorgian rugby officials have reaffirmed calls for greater inclusion in European competitions amid fears that they could be frozen out.

Georgian Super Cup side Black Lion are in the mix to be one of the two invited sides involved in today’s European Challenge Cup draw but there are reports suggesting the national team could be frozen out of the Six Nations until 2030 at the earliest.

AUSTRALIA WIN ASHES THRILLER

Tourists

rally to beat hosts in one of the great Ashes Tests to lead series 1-0

AUSTRALIA scored 98 runs in the final session of the final day at Edgbaston to beat England by two wickets and take a 1-0 series lead in the 2023 Ashes.

Momentum swung throughout the day with both sides looking in the ascendancy and in desperate need of rescuing on multiple occasions.

The hosts were heading towards a famous victory in England’s second city but a rallying 55-run partnership between captain Pat Cummins (44 not out) and fellow bowler Nathan Lyon (16 not out) handed the tourists victory — and the upper hand in their mission to retain the urn.

which Australia were chasing victory against a ferocious England attack. They failed in their cause 18 years ago but avenged that loss in the final session last night.

The Test will go down as one of the greatest in recent Ashes history with the result unpredictable for all but the opening two sessions of the match.

Australia began the final day needing 174 runs with seven wickets in hand but rain wrote off the morning session as Edgbaston’s ground staff battled to make the pitch playable. They did.

Scott Boland was the first to fall on day five, the third second-innings wicket to

Wimbledon to consider using AI instead of line judges

MATT HARDY

WIMBLEDONchiefs are considering replacing human line judges with AI in future editions of the Grand Slam event in SW19.

The All England Club is sticking with line judges for next month’s Championships in SW19 and insists it has no immediate plans to make the switch. But it is increasingly incorporating technology into its operations and remains open to following the US Open in swapping human line judges for computers.

“What I can say is that for 2023 we have definitely got line judges,” said All England Club technology

director Bill Jinks.

“Line calling technology has changed [but] we’ve been using the challenge system since we started with line calling in 2007 and it currently works for us.

“Who’s to say what might happen in the future? Obviously I know what’s been going on with announcements on ATP Tour [using electronic judges by 2025]. Things like that will be considered in the future.”

Line calls remain a contentious issue in tennis and Novak Djokovic smashed a racket in frustration after a close call cost him a set at the Monte Carlo Masters in April.

Bairstow off Stuart Broad’s bowling. The world’s third best batter, according to official rankings, Travis Head fell for 16 before Cameron Green’s defiant 28-run stand was killed off by Ollie Robinson clipping the stumps.

But the momentum dramatically shifted when England captain Ben Stokes dismissed the resilient Usman Khawaja for 65 runs. The opener had been a stalwart for the tourists throughout this Test, batting at points on all five days.

Former captain Joe Root took the eighth wicket when he caught and bowled Alex Carey after captain Stokes chose to decline the second new ball as

But with play continuing until bad light dictated otherwise, England battled to deny Australia runs as the likelihood of taking wickets diminished.

Australia needed 72 runs when Cummins came to the crease. He finished the day on 44 not out and Lyon concluded on an unbeaten 16 to earn a staggering victory for the tourists.

“We’re absolutely devastated that we’ve lost, the lads are in pieces,” Stokes said. “But if that game’s not attracting people to our sport then I’m not sure what will.”

The Ashes continues at Lord’s a week on Wednesday, with Australia leading the series 1-0.

Black Lion currently play in the Super Cup, a franchise competition that also includes teams from Spain, Portugal and the Netherlands. Black Lion have won both editions, and have also featured in the South African Currie Cup and Super Rugby Americas.

With two spots up for grabs in the Challenge Cup, there are hopes that Black Lion will be given the opportunity to shine.

“We believe that we deserve our place more than anyone,” Black Lion and international head coach Levan Maisashvili tells City A.M. “We are putting lots of finances into [the Super Cup, Currie Cup and Super Rugby Americas] to show that we are competitive, and that we are stable both financially and technically.

“We understand that no one could accept us in any high-level championship from the beginning without us showing all of these [aspects].

“Our activities during the last two years allow us to consider that we deserve to take part in the Challenge Cup. The more Black Lion develops the more the national team does.”

Georgia Rugby Union president Ioseb Tkemaladze was more reserved on the topic, citing his enjoyment in attending recent CONTINUED ON PAGE 23

Paddington hands Aidan

O’Brien Royal Ascot record

MATT HARDY

PADDINGTON’S victory in the St James’s Palace Stakes handed trainer Aidan O’Brien a record 83rd victory at Royal Ascot yesterday.

Ridden by jockey Ryan Moore, Paddington denied Frankie Dettori a winner on Chaldean in the Italian’s last week at the festival before retirement.

“He’s an incredible horse, he just keeps improving and improving,” O’Brien said of Paddington.

Elsewhere, Hollie Doyle became the first woman to ride a Group One winner at Royal Ascot.

The 26-year-old jockey won the King’s

Stand Stakes aboard Bradsell after a stewards’ inquiry.

In doing so she overtook Hayley Turner as the most successful female jockey at Royal Ascot.

“Coming to Royal Ascot and again having a winner on the first day is unbelievable,” Doyle said.

“I have a big book of rides but you play it down every year thinking if I got one I’d be doing well.

“It’s a great achievement and hopefully there will be plenty more ahead. You live for Group Ones.”

King Charles III and Queen Camilla were in attendance at Royal Ascot, the first edition since the passing of Queen Elizabeth II.

TENNIS

HORSE RACING