Last week London suffered a terrorist attack in which 4 people were killed and 50 injured. Our thoughts and prayers go out to the friends and family of the victims.
This weeks news includes; Google loses advertisers, , Thames Water faces record fine, Deutsche Bank announces UK HQ post-Brexit, Goldman Sachs to move jobs out of UK.
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.
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Opinion articles of the week:
- CNN claims that London’s bustling tourism sector could come under strain following terrorist attack in the heart of the city.
- City A.M explains Why blockchain is about to change finance as you know it.
- City A.M looks at Why banks should say thanks to fintech startups
1. BREXIT: ARTICLE 50 TO BE TRIGGERED 29/03/17
Prime Minister Theresa May is to officially notify the European Union next Wednesday that the UK is leaving. Downing Street said she would write a letter to the European Council, adding that it hoped negotiations on the terms of exit and future relations could then begin as quickly as possible.
An EU spokesman said it was “ready and waiting” for the letter. Mrs May’s spokesman also rejected reports an early election may be held, saying: “It’s not going to happen.”
Under the Article 50 process, talks on the terms of exit and future relations are not allowed until the UK formally tells the EU it is leaving. If all goes according to the two year negotiations allowed for in the official timetable, Brexit should happen in March 2019.
A No 10 spokesman said the UK’s Ambassador to the EU, Sir Tim Barrow, informed the European Council, headed by President Donald Tusk, earlier on Monday of the date that Article 50 would be triggered. Mrs May is expected to make a statement to the House of Commons on Wednesday shortly after invoking Article 50, setting out her aims. (BBC News)
2. YOUTUBE & GOOGLE LOSE BIG ADVERTISERS
The growing advertiser boycott of YouTube has reached the US, with AT&T, Johnson & Johnson, Verizon and Enterprise all halting adverts on the site, as well as Google’s wider ad networks, over the video-sharing site’s inability to guarantee promotional messages won’t appear alongside extremist content.
Some of the new members of the boycott have also expanded the scope of the complaints, from a specific focus on YouTube to a broader criticism of Google’s ad platform. “We are deeply concerned that our ads may have appeared alongside YouTube content promoting terrorism and hate,” AT&T said. “Until Google can ensure this won’t happen again, we are removing our ads from Google’s non-search platforms.”
The companies have joined the boycott, which began in the UK with organisations including the BBC, the Guardian and the British Government, despite the efforts of Google to quell fears on Monday.
Google’s chief business officer has promised a three-pronged plan to improve its advertising network, and apologised to brands for placing their ads “on content that was not aligned with their values”. The executive, Philipp Schindler, promised to tighten up policies, offer better controls to advertisers, and use AI to review questionable content.
But the number of companies boycotting Google’s ad networks continues to grow, now standing at around 250 firms. As well as YouTube, it has expanded to Google’s other major advertising service, AdSense, which brands use to place adverts on third-party sites. The most important of Google’s revenue sources, AdWords, is unaffected for now. The service lets companies advertise on Google itself, targeting specific search queries. (The Guardian)
3. UK BANKS ACCUSSED OF £65bn MONEY LAUNDERING SCANDAL
The Economic Secretary to the Treasury has vowed that the Government will crack down on money laundering practices, after several of the UK’s biggest banks were accused of processing money from a Russian scam, believed to involve up to $80bn (£65bn).
Speaking in the House of Commons, Simon Kirby said the “Government will do what it takes” to seek out anyone who abuses the system, and would examine closely whether recent information in the press, regarding money laundering from Russia, would allow the progression of an investigation.
The Guardian on Tuesday reported that HSBC, the Royal Bank of Scotland, Barclays and Coutts had waved through hundreds of millions of pounds of transactions linked to a major scam in Russia.
The Independent first reported on the money laundering operation in 2014, shortly after it was shut down by investigators in the former Soviet republic of Moldova. The scheme, which ran from 2010 to 2014, allowed at least £15bn to be moved out of Russia. The latest documents suggest that figure may be as high as £65bn, according to The Guardian. Much of the money is believed to be linked to organised crime and corrupt officials, who were seeking to “clean” their cash so that it could be spent without suspicion.
The process involved using a series of front companies in the UK, which allow the actual owners behind them to remain a secret. The companies conducted fake business deals between themselves then sued each other in courts in Moldova, demanding the repayment of hundreds of millions of pounds of loans.
The new documents reportedly reveal that, once laundered, some of the money was spent on diamonds from a jewellers in Bond Street, furs, chandeliers from a Chelsea boutique and boarding fees at Millfield, a prestigious public school in Somerset. The evidence includes details of 1,920 transactions totalling nearly £600m that went through UK banks, with a further 373 routed through US banks, according to The Guardian. (The Independent)
4. THAMES WATER FINED £20m
Thames Water has been ordered to pay a record fine of £20.3m for repeatedly allowing untreated sewage to flow into the Thames.
It is the largest penalty handed to a water utility company for an environmental incident, after the Thames was polluted with 1.4 billion litres of raw sewage. However, the fine amounts to just two weeks of the company’s profit.
The untreated effluent entered the waterway in Oxfordshire and Buckinghamshire over several months in 2013 and 2014. The discharge left people and livestock ill, killed fish and other animals living in the river, and put fishermen out of business.
Thames Water admitted 13 breaches of environmental laws at Aylesbury Crown Court – over discharges from treatment works in Aylesbury, Didcot, Henley and Little Marlow, and a pumping station at Littlemore.
It also pleaded guilty on 17 March over a smaller discharge from an unmanned sewage treatment plant at Arborfield in Berkshire in September 2013. (Sky News)
5. DEUTSCHE BANK ANNOUNCES LONDON HQ POST-BREXIT
Deutsche Bank AG is in exclusive talks to move its U.K. headquarters to a building being constructed in the City of London financial district, the latest European lender to commit to the capital in the aftermath of Brexit.
Germany’s biggest bank is negotiating with Land Securities Group Plc on a 25-year lease for the property at 21 Moorfields, with employees due to start moving to the new offices in 2023, according to a memo sent to the lender’s staff and seen by Bloomberg News. The developer Friday confirmed that it’s in talks with Deutsche Bank over an advance rental that would require design changes to the building.
Deutsche Bank joins Credit Agricole SA, which last year extended the lease for its London headquarters until 2025. Dutch lender ING Groep NV is also said to be planning to move as many as 60 trading jobs to the capital. Corporate demand for office space has fallen since the Brexit vote in June, with BNP Paribas SA estimating that firms leased 19 percent less space in central London in 2016 than a year earlier.
Deutsche Bank’s move is subject to the lease being agreed to and the building gaining planning consent, according to the memo. Land Securities, which didn’t comment on the other details of the talks, said negotiations will take several months and there is no guarantee they will lead to a transaction.
The German bank, which is in the process of overhauling its businesses, said this month that there may be additional job losses. In 2015, it predicted that 9,000 jobs would be eliminated through 2018. (Bloomberg)
6. GOLDMAN SACHS TO MOVE HUNDREDS OF JOBS AFTER BREXIT
Goldman Sachs is to start moving hundreds of staff out of London before a Brexit deal is struck, the bank’s European boss has confirmed.
Richard Gnodde, chief executive of Goldman Sachs International, said on Tuesday the decision to relocate workers was part of the bank’s contingency plan for the UK leaving the EU. “We are going to start to execute those contingency plans”, he told CNBC.
Gnodde said the bank, which employs 6,000 staff in the capital, would take extra office space in Frankfurt and Paris. Speaking a week before Theresa May will formally being the UK’s exit from the EU by triggering article 50, Gnodde said: “We start with a significant European footprint, we are licensed with banks in Germany and in France.”
“Over the next 18 months or so we are going to upgrade those facilities, we’ll be taking extra space in a number of them and be increasing our headcount and infrastructure around those facilities,” said Gnodde.
He said the numbers involved were “in the hundreds of people as opposed to anything much greater than that” and would also involve hiring people in the remaining 27 EU countries .
In January, the bank was the subject of speculation it could shift half of its 6,000-member workforce out of London, with 1,000 of the jobs relocated to Frankfurt. At the time Goldman said no decisions had been made. Goldman has about 200 staff in Frankfurt and 100 in Paris. (The Guardian)
7. RBS AND NATWEST CLOSE OVER 150 BRANCHES
Hundreds of jobs will be lost following a decision to close almost 160 RBS and NatWest branches. RBS blamed a “dramatic shift” in banking, with branch transactions falling 43% since 2010. In the same period, online and mobile transactions have increased by more than 400%.
About 770 staff will be affected as 30 RBS and 128 NatWest branches are closed, but hundreds of workers will be redeployed. An RBS spokesman said the bank now had 4.2 million customers who used its mobile app – an increase of two million since 2014.
After the closures 151 RBS and 856 NatWest branches will remain. RBS remains still majority-owned by taxpayers following its multi-billion government bailout almost a decade ago.
Unite union acting general secretary Gail Cartmail accused the bank of “turning its back” on the communities that have kept it in business for generations. (BBC News)
8. SECURE BANK IS NOW OFFERING MORTGAGES TO THOSE IN THE GIG ECONOMY
Secure Trust Bank is launching a UK mortgage offering focusing on those individuals who might struggle to bag a loan from a high street lender.
The Solihull-headquartered challenger is honing in on the self-employed and the gig economy. Those people working in these fashions might struggle to prove their income to a bank and therefore might find it trickier than employees to get a mortgage.
The bank intends to offer loans of up to £2m per household on a two-, three- or five-year fixed rate basis with a maximum loan to value of 80 per cent.
Secure Trust Bank Mortgages will be headed by managing director Esther Morley, who joined the bank around a year ago and has previously worked for Start Mortgages, Investec and HSBC.
“There are millions of people looking to get themselves on the property ladder, move home or find a better deal with a new mortgage provider,” said Morley. “Our offering will serve customers who don’t fit the criteria of traditional lenders.” (City A.M)
9. UK INFLATION RISES
Rising fuel and food prices helped to push last month’s inflation rate to the highest since September 2013.
Inflation as measured by the Office for National Statistics’ Consumer Prices Index (CPI) jumped to 2.3% in February – up from 1.8% in January. The increase has pushed the rate above the Bank of England’s 2% target.
Food prices recorded their first annual increase for more than two-and-a-half years, standing 0.3% higher in February than a year earlier. The Bank of England has said it expects inflation will peak at 2.8% next year, although some economists think the rate could rise above 3%. (BBC News)
10. RETAIL FACES WORST SLUMP IN 7 YEARS
Retail sales have been suffering their worst slump in nearly seven years as inflation bites – despite a partial bounce-back last month. According to official figures, sales volumes grew by a better-than-expected 1.4% in February but the underlying pattern pointed to the impact of higher fuel prices eating into shoppers’ disposable income.
For the three months to February, sales were down by 1.4%, the worst decline since March 2010, according to the Office for National Statistics (ONS).
The figures point to the difficulty facing high street retailers and come as Next reported its first decline in annual profits since 2009. Figures earlier this week showed inflation at a three and a half year high in February as the collapse in the pound since the Brexit vote, which makes imports more expensive, fed through to prices.
The ONS data showed average prices at petrol stations were up 18.7% on the same month last year. Spending by shoppers was robust in the months following last June’s Brexit vote but more recently there have been signs of retail sales wilting.
Bank of England governor Mark Carney has suggested that the consumer-led economic expansion seen in the aftermath of the referendum could fizzle out. (Sky News)
