Below are our top 10 stories that you need to know about. Be sure to check our twitter page for regular posts of important headlines. Click on the links for full stories.
Brexit Opinion articles of the week:
One investor is arguing that UK fintech startups are more attractive than ever post-Brexit. Click here for more.
The Financial Times on the other hand argues that UK tech investment is going to be one of the first things to suffer after Brexit. Click here for more.
John Lewis boss, Andy Street claims that Post-Brexit sterling plunge a big issue for his company and consumer spending in general. Click here for more.
Opinion Article of the week:
Self-driving car fleets won’t destroy the auto industry but, they will hurt it significantly. Click here for more information.
1. CHILCOT ENQUIRY
Sir John Chilcot has outlined his findings on the UK’s involvement in the 2003 Iraq War and the lessons to be learned from it.
The report spans almost a decade of UK government policy decisions between 2001 and 2009.
It covers the background to the decision to go to war, whether troops were properly prepared, how the conflict was conducted and what planning there was for its aftermath, a period in which there was intense sectarian violence.
The main points are; the Iraq war was NOT a last resort and all peaceful options had not been exercised. Evidence of weapons of mass destruction in Iraq had not been established beyond reasonable doubt. The circumstance in which a legal basis for declaring war was determined was “far from satisfactory”. The UK was militarily underprepared for the invasion.
For more information on the enquiry click here. (BBC News)
2. ITALIAN BANKS STRUGGLE
Italy’s banks are struggling with a burden of bad debt, loans that are unlikely ever to be repaid fully. They are a potential flashpoint in an economy that has for some time been seen as posing wider risks to the EU’s currency area. Meanwhile, the Italian government is considering a banking sector bailout which could breach European Union rules.
It’s the size of the Italian economy and its government debt that makes the country a smouldering financial volcano. The risks are aggravated by the political situation. It’s the third-largest economy in the eurozone. The government debt burden, depending on which figures you look at, is certainly one of the largest in the eurozone, indeed the largest by one measure.
One of the roots of the problem is Italy’s two decades of dismal economic performance. Measured by total economic activity (gross domestic product or GDP), the economy remains about 8% smaller than it was at the onset of the international financial crisis. It is roughly the same size as it was at the turn of the century.
That has made it harder to generate the tax revenue needed to keep the debt burden down. It has also increased the chances of businesses getting into difficulty and being unable to maintain their loan payments. The result: Italian banks are burdened with a massive problem of bad debts equivalent to about a fifth of the country’s annual economic activity. (BBC NEWS)
For the Financial Times’ analysis of the crisis and the possible options for Italy, click here.
3. DATE SET FOR FIRST LEGAL HEARING TO STOP ARTICLE 50 BEING TRIGGERED
The first legal action against Brexit by a private citizen has been timetabled for 19 July on behalf of a hairdresser.
Lawyers representing Deir Dos Santos, a British citizen, have lodged a judicial review challenge. It will argue that triggering Article 50 – formally beginning the process of the UK’s withdrawal from the European Union – can only be done with Parliament’s approval and not just by the Prime Minister.
The majority of MPs in Parliament voted to remain in the EU and the lawsuit seeks to delay leaving the organisation. It also highlights how the approach of a pro-Brexit Prime Minister, such as Andrea Leadsom, could mean the UK’s exit strategy is markedly different to that of a pro-Remain leader, such as Theresa May.
Dominic Chambers QC, the barrister leading this case said “The purpose of a judicial review is to correct the executive when they have gone wrong. We say the executive will be abusing their powers if they give an Article 50 notification without the approval of Parliament.”
For more on this hearing and Article 50 click here. (The Independent)
4. REAL ESTATE INVESTMENT FUNDS HALT TRADING AFTER BREXIT
Three of the U.K.’s largest real estate funds have frozen almost 9.1 billion pounds ($12 billion) of assets after Britain’s shock vote to leave the European Union sparked a flurry of redemptions.
M&G Investments, Aviva Investors and Standard Life Investments halted withdrawals because they don’t have enough cash to immediately repay investors. About 24.5 billion pounds is allocated to U.K. real estate funds, according to the Investment Association.
The pound fell to its weakest level in three decades against the dollar Tuesday, surpassing lows reached in the aftermath of the Brexit vote, as the freezing of the property funds spooked global markets. Bank of England Governor Mark Carney pledged to shore up financial stability on a day when a survey showed a plunge in U.K. business confidence. (Bloomberg)
5. FOUR BANKS COMMIT TO LONDON POST-BREXIT
Four of the biggest US banks have committed to helping maintain London’s position as a global financial hub after the UK leaves the European Union. Since the referendum vote there have been concerns that banks would reduce their staff and offices in the country.
In a statement the banks and Chancellor George Osborne said they would work to ensure London “retains its position”. However, they did not say whether this meant that they would keep the same number of jobs and offices in the UK.
Ahead of the UK’s referendum on the EU, Jamie Dimon, chief executive of JP Morgan, said the bank could move 4,000 jobs out of the UK if the country voted to leave the EU.
The banks signing the statement included JPMorgan, Goldman Sachs, Bank of America Merrill Lynch and Morgan Stanley, as well as the UK’s Standard Chartered, which makes most of its profit in Asia. (BBC News)
6. DEUTSCHE BANK NAMED MOST RISKY BANK BY IMF
Deutsche Bank AG is the riskiest financial institution in the world as a potential source of external shocks to the financial system, according to the International Monetary Fund (IMF).
The IMF said the German banking system poses a higher degree of possible outward contagion compared with the risks it poses internally.
“In particular, Germany, France, the U.K. and the U.S. have the highest degree of outward spillovers as measured by the average percentage of capital loss of other banking systems due to banking sector shock in the source country,” the IMF added.
The news came just after the Federal Reserve said U.S. units of Deutsche Bank and Spain’s Santander were the only ones among 33 banks that failed the final round of its “stress test,” conducted to gauge how they would fare in a new financial crisis. (Wall Street Journal)
7. TATA STEEL SALE PUT ON HOLD
The sale of Tata Steel’s UK business is on hold as the company considers a European tie-up, creating further uncertainty for British steelworkers
Speaking after a board meeting in Mumbai, Tata said it had started talks with “strategic players in the steel industry”.
Tata said the uncertainty created by Brexit was a factor in its deliberations. The company declared its intention to sell all or part of its UK business in March.
It employs more than 4,000 workers at its plant in Port Talbot in Wales and over 2,000 more at its speciality businesses in Hartlepool, Rotherham and Stocksbridge.
A shortlist of seven potential buyers was drawn up in May, but one of the biggest stumbling blocks to the sale of the UK business has been the legacy of the British steel pension fund which Tata inherited when it bought the business in 2007. It has 130,000 members and a deficit of £700m. (BBC News)
8. MASTERCARD $19 BILLION CLASS ACTION LAW SUIT
Mastercard is facing a £19bn damages claim – the biggest in UK legal history – for allegedly imposing “anti-competitive” charges on consumers. As many as 40 million people could be in line for compensation from the firm, according to lawyers, with some payouts in the hundreds of pounds.
The class action case suggests MasterCard infringed EU law by imposing charges, known as “interchange” fees, on the use of MasterCard debit and credit cards. It claims Mastercard’s fees were “illegal” and set at an “anti-competitive, high level”.
The case will be heard before the Competition Appeal Tribunal, a specialist court that hears competition law disputes, and is likely to begin in September. It is one of the first big tests of the Consumer Rights Act 2015.
The Act enables a collective damages claim to be brought on behalf of a class of people who have suffered loss. Under the new rules, all UK consumers who have lost out automatically become part of the group of claimants unless they explicitly opt-out. (Sky News)
9. MARS £23 MILLION UK INVESTMENT
Food giant Mars is to invest £23 million in a manufacturing plant, creating new jobs and boosting production. The money will be invested in the King’s Lynn site in Norfolk, where a new production line will be opened next year to meet demand for Uncle Ben’s Ready to Heat rice.
Michael Ryan, regional president of Mars Food, Western Europe & Russia, said: “We have been manufacturing from this site for over 50 years and continue our commitment to investing and growing the site which manufactures some of the UK’s favourite family brands.”
The site currently employs almost 300 workers. The new investment will create 28 jobs. (Business Reporter)
10. AMAZON TO ADD 1,000 UK JOBS
Amazon has announced it is creating 1,000 new jobs across the UK as the company continues to grow its ultra-fast delivery service, Prime Now.
Prime now serves more than 30% of the population.
The recruitment drive builds on the 2,500 positions the online firm announced earlier this year, with the new jobs spread across Edinburgh, Manchester, Leicestershire, Cambridge and London.
The newly created jobs at the internet giant, bring the total number of permanent employees at Amazon to 15,500 across the UK, and the business also supports 74,000 UK jobs via Amazon Marketplace. (Sky News)