Top 10 Stories of the Week! 24/10/16

Below are our top 10 stories that you need to know about. Be sure to check our twitter page and Facebook page for regular posts of important headlines. Click on the links for full stories.

This week’s news includes;  EU and Canada finally sign trade deal,  Deutsche Bank’s surprise profits,  London’s IPO market struggles with O2 owner shelving IPO plans faces and Microsoft & Apple announce UK price increases to counteract falling pound.


Opinion articles of the week:

There are four key reasons why banks will not leave Britain after Brexit. Click here for more.

What is passporting and why is it important? Click here for more.

The boss of the World Trade Organisation has claimed that Brexit will not cause UK trade ‘disruption’. Click here for more.



 The European Union and Canada have signed a long-delayed landmark trade deal, following weeks of uncertainty due to opposition in Belgium. The deal was signed in Brussels by Canadian Prime Minister Justin Trudeau and top EU officials.

The signing ceremony initially planned for Thursday had been cancelled after Belgium’s Wallonia region vetoed the agreement. All 28 EU states approved the deal on Friday when consensus was reached.

The Comprehensive Economic and Trade Agreement, known as Ceta, required all EU member states to endorse it. The deal removes 99% of tariffs – and officials hope it will generate an increase in trade worth $12bn (€10.9bn; £9.8bn) a year.

After the agreement was finally signed several hours later, Mr Trudeau said: “Canadians and Europeans share the understanding that in order for real and meaningful economic growth, we need to create more good, well-paying jobs for our citizens.

European Commission President Jean-Claude Juncker referred to “a new chapter” in relations between the EU and Canada, which would open new opportunities “more than half-a-billion people on both sides of the Atlantic”. (BBC News)



The government has approved a third runway at Heathrow to expand UK airport capacity following a cabinet committee meeting on Tuesday. Transport Secretary Chris Grayling said the “truly momentous” decision would support trade and create jobs.

Gatwick airport said it was disappointed with the decision, which was “not the right answer for Britain”. The issue has split the Cabinet, with Foreign Secretary Boris Johnson saying a third runway was “undeliverable”.

The Department for Transport said a new runway at Heathrow would bring economic benefits to passengers and the wider economy worth up to £61bn and create as many as 77,000 additional local jobs over the next 14 years.

Heathrow said the expansion would allow it to offer more direct flights to UK destinations as well as up to 40 new cities abroad such as Wuhan, Osaka and Quito. A public consultation will now be held on the effects of airport expansion before the government makes a final decision as part of a national policy statement on aviation.

MPs will then vote on that decision in the winter of 2017-18. It is unlikely that any new runway capacity would be operational before 2025. Construction is not likely to begin until 2020 or 2021, the Airports Commission has said.

Sadiq Khan, the mayor of London, also said expanding the west London airport was the wrong decision for both London and the UK. (BBC News)

A residents group has already launched a legal challenge against the expansion. (City A.M)


Nissan was a vocal opponent of Brexit and warned that the U.K.’s split from Europe could hurt the economy. That was then. Now Nissan is recommitting itself to Britain.

The Japanese automaker, which operates the largest auto factory in the U.K, said it will bring production of its X-Trail vehicle to the U.K. and will continue producing Qashqai models in the country. The X-Trail is currently produced in Russia and Japan.

The company’s massive facility in Sunderland employs 7,000 people and produces over 470,000 vehicles per year. Nissan’s commitment to new production at Sunderland, while still making the Qashqai there, means these 7,000 jobs are safe.

Nissan said it was convinced to keep production in the country after getting reassurances from the British government, though it wouldn’t provide details.

Car makers, which often source parts from other areas of the EU for vehicles assembled in the U.K., fear Brexit could add costs and delays to their European operations through customs duties at the border. Nissan exports 80% of its U.K. production.

Meanwhile, the lower pound may make Britain more attractive for global manufacturers by lowering costs. The pound has crashed 19% versus the U.S. dollar since the Brexit referendum in June.

The automotive industry in the U.K. is worth about £72 billion ($88 billion) in annual sales, and about 814,000 British jobs depend on automakers. (CNN)


Deutsche Bank surprised investors by reporting a profit for the third quarter of the year, as its chief executive admitted the huge settlement it faces from American authorities for a decade-old mis-selling scandal was having “an unsettling effect”.

Germany’s biggest bank has been rocked by reports that the US Department of Justice might demand as much as $14bn to settle the long-running dispute over the way it sold residential mortgage backed securities before the 2008 banking crisis.

Announcing profits of €619m, the chief executive, John Cryan, said: “The results for the quarter demonstrate well the strengths of our operating businesses and the outstanding work of our people. We continued to make good progress on restructuring the bank.

He warned staff in a memo that “the situation will remain tough for some time to come”.

Revenues were depressed and there were some outflows, the bank acknowledged, as a result of anxiety about its ability to pay the penalty. The bank’s liquid assets – ones it can use quickly to pay demands for cash – fell €23bn to €200bn between the end of June and the end of September. But Marcus Schenck, the finance director, said this had now stabilised.

Cryan has made clear that Deutsche – which employs around 8,000 people in the UK – does not expect the final bill to be as high as $14bn and has dismissed reports that the bank has called on the German government for help.

Deutsche’s shares plunged last month to levels they last traded at in the 1980s, slipping through €10, and the bank acknowledged that the anxiety about the DoJ settlement had knocked its business. On Thursday its shares were trading at around €13. A year ago they were at €27. (The Guardian)


Uber drivers have won the right to be classed as workers rather than self-employed.

The ruling by a London employment tribunal means drivers for the ride-hailing app will be entitled to holiday pay, paid rest breaks and the national minimum wage.

The GMB union described the decision as a “monumental victory” for some 40,000 drivers in England and Wales. Uber said it would appeal against the ruling that it had acted unlawfully.

The San Francisco-based company had argued that its drivers were not employees but self-employed contractors. The ruling accused Uber of “resorting in its documentation to fictions, twisted language and even brand new terminology”, adding: “The notion that Uber in London is a mosaic of 30,000 small businesses linked by a common ‘platform’ is to our mind faintly ridiculous.” (BBC News)

This decision could cost the company in excess of £17m, according to an employment lawyer.

Sean Nesbitt, partner in the employment team at law firm Taylor Wessing, said: “It is economically significant to Uber. With 40,000 drivers, statutory holiday pay rights which go with worker status could be as much as £13.88m pa.”

Uber has immediately responded by saying it will appeal the ruling, which will likely delay the process. Additionally, the taxi-hailing firm points out that many of its drivers enjoy the arrangement precisely because it’s flexible. A study commissioned by the firm and carried out by ORB said just over three-quarters of 1,000 Uber drivers polled preferred being self-employed and choosing their own hours. (City A.M)


Companies attempting to  go public in the U.K. post Brexit face an uphill battle.

Financial-software maker Misys cancelled its planned initial public offering in a statement Thursday and the chief executive officer of Telefonica SA’s O2 said Wednesday the company is postponing a potential listing of the U.K. mobile-phone unit until at least next year.

Investor uncertainty hurt IPO volumes in the lead-up to the June vote, and concerns about how the British economy would perform outside of the European Union depressed listings afterward. IPOs in London have raised about $6.8 billion so far this year, less than half of what they sold in the same period last year, data compiled by Bloomberg show.

“Like any shock to the market, Brexit is another form of volatility,” said Mark Hughes, U.K. capital markets partner at PricewaterhouseCoopers LLP. “The difference with Brexit is that the crucial decisions won’t happen until next year.”

Eleven European companies withdrew or postponed listings amounting to $5.7 billion since the June 23 referendum amid uncertainty over Brexit and the outcome of the U.S. elections in November, according to the data. Germany’s IVG Immobilien AG’s OfficeFirst unit and the U.K.’s Pure Gym Group Plc shelved IPO plans this month, both citing challenging conditions. Telefonica pulled an IPO of its Spanish infrastructure business last month. (Bloomberg)



Microsoft is to increase its prices by as much as 22 per cent due to the slump in the value of the pound following the EU referendum result, a rise that is likely to affect thousands of UK businesses.

The value of sterling against the dollar has fallen by about 18 per cent since the UK voted to leave the EU in June, prompting tech companies such as Apple and Dell to increase prices in Britain.

Microsoft, one of the biggest sellers of business software in the UK, said the new prices will come into effect in January 2017. Prices of Microsoft’s enterprise software will be increased by 13 per cent, while prices for its cloud services will jump by 22 per cent.

Microsoft’s Office suite of productivity tools, which includes programmes such as Word, Powerpoint and Outlook, is likely to be among the softwares expected to see a price rise.

Microsoft is the latest company to raise prices in recent weeks, blaming the referendum for the slump in the pound.  The move comes after consumer good giants Unilever attempted to pass a 10 per cent price increase to UK supermarket Tesco earlier this month. The 24-hour pricing row saw Tesco briefly suspending online sale of Marmite and other popular brands. (The Independent)


Apple has increased the prices of its laptop and desktop computers in the UK by hundreds of pounds. On Thursday, the company unveiled new Macbook Pro laptops, with prices similar to the US after currency conversion and addition of UK VAT.

But the company also increased the prices of its older computer products, including the three-year-old Mac Pro, by hundreds of pounds. One analyst said consumers should expect further price increases.

“Apple has to recalibrate prices after significant currency fluctuations, and since the EU referendum, UK prices are out of sync with the dollar,” said Patrick O’Brien, analyst at the Verdict Retail consultancy. A number of technology companies have increased their prices in the UK, reflecting the lower value of the pound.

Apple’s least expensive laptop – the 13in Macbook Air, last updated in March 2015 – now costs £949, up from £849. Its Mac Pro desktop computer – last updated in December 2013 – now costs £2,999, up from £2,499. (BBC News)


Job Cuts

Twitter is planning widespread job cuts, to be announced as soon as this week, according to people familiar with the matter.

The company may cut about 8 per cent of the workforce, or about 300 people, the same percentage it did last year when co-founder Jack Dorsey took over as chief executive officer, the people said. Planning for the cuts is still fluid and the number could change, they added. The people asked not to be identified talking about private company plans.

Twitter, which loses money, is trying to control spending as sales growth slows. The company recently hired bankers to explore a sale, but the companies that had expressed interest in bidding – Inc, The Walt Disney Co and Alphabet Inc – later backed out from the process.

Twitter’s losses and 40 per cent fall in its share price the past 12 months have made it more difficult for the company to pay its engineers with stock. That has made it harder for Twitter to compete for talent with giant rivals like Alphabet, Google and Facebook. Reducing employee numbers would relieve some of this pressure. (The Independent)

Vine shut down

Twitter also announced this week that it would be shutting down its video Twitter has announced it is to close its video sharing service Vine about four years after it launched. Vine let people share six-second-long video clips that played on a loop.

Twitter did not give a reason for the closure. Twitter acquired Vine before it had officially launched in 2012 for a reported $30m (£24.6m). But it has since integrated a separate video facility into Twitter’s main platform, and acquired and launched the livestreaming app Periscope.

“Nothing is happening to the apps, website or your Vines today,” the blog added.

“You’ll be able to access and download your Vines. We’ll be keeping the website online because we think it’s important to still be able to watch all the incredible Vines that have been made.” (BBC News)


Lloyds Banking Group has taken another £1bn hit for payment protection insurance, in a move it hopes will cap its bill for the mis-selling scandal at £17bn. The fallout has cost the industry has already reached £37bn and looks likely to rise further in the coming days when other high street banks could add to their existing provisions for mis-selling the insurance product.

George Culmer, Lloyds’ finance director, said the £1bn top-up should be the last “big” addition to the bank’s PPI bill and was driven by the decision by the Financial Conduct Authority to set a deadline of June 2019 – rather than spring 2018 – for claims.

Lloyds has incurred the largest single bill for the scandal as it also owns HBOS, which it took over during the 2008 banking crisis.

The charge for PPI was revealed as the bank reported its profits for the first nine of months of the year, which were 50% higher at £3.2bn despite the PPI charge. In the third quarter, however, profits were down 15% at £811m. Listed among the charges taken by the bank was another provision of £150m for packaged accounts, where products such as travel insurance and roadside assistance policies are bundled up alongside current accounts.

The taxpayer still owns a 9% stake in Lloyds – down from 43% at the time of the financial crisis – and the slump in its shares has forced chancellor Philip Hammond to abandon a plan to sell shares to the public at the discount. Instead Hammond has signalled that the remaining shares will be sold to City investors on the stock market. (The Guardian)


The first officially recognised UK press regulator has got the go-ahead from an independent panel.

Impress, established by press reform campaigners, received formal approval from the Press Recognition Panel (PRP).

Campaign group Hacked Off has welcomed the decision, but bodies representing the press warned it will bring “state-sponsored” regulation of newspapers. Most newspapers have signed up to rival Ipso – the press-funded regulator which did not seek official recognition.

Impress, which currently regulates 25 small specialist publications, has received funding from former Formula One boss Max Mosley, the Joseph Rowntree Reform Trust and author JK Rowling. It was given the go-ahead by the PRP, which was set up in the wake of the Leveson Inquiry to ensure any future press regulator met certain standards.

Evan Harris, joint executive director of Hacked Off, which campaigns for greater press regulation, said the decision paved the way for the “first regulator to have proven its independence and effectiveness” under the Leveson system of independent assessment.

“The days of failed industry-controlled regulators like the PCC and its sham replacement Ipso are numbered,” he said.

“This decision makes Impress the only regulator which the public, readers and victims of press abuse can trust to regulate newspapers and safeguard freedom of the press, while offering redress when they get things wrong.”

For more about press regulation, click here. (BBC News)


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