This weeks news includes; BA travel chaos, Greece approves austerity measures, Barclays faces £1bn law suit, Vodafone agrees on merger in Malta.
On the 23rd of May 2017, 22 people lost their lives to a terrorist attack in Manchester after an Ariana Grande concert. Our thoughts and prayers are with the friends and families of the victims.
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:
- Bloomberg looks at the reason why Bitcoin’s price has soared to almost $2000.
- Business Insider claims that emerging markets and Europe will outperform the US over the next decade.
- The Independent looks at report showing half of UK companies believe that artificial intelligence will fundamentally change their industry.
- Business Insider claims that the ‘gig economy’ has broken a fundamental link in capitalism that was good for workers.
1. BA CHAOS
On Saturday BA faced a computer network failure causing it cancel all flights from Heathrow and Gatwick, leaving thousands of passengers stranded. The failure was cause by a power supply issue and this disrupted all systems including its website and call centres.
The problems continued on into Sunday where more than a third of flights were cancelled.
The cost of this outage is still yet to be calculated but with the airline liable to reimburse £275 for accommodation, travel and refreshments per day.
For more on this issue, view BBC News’ analysis.
2. GREECE BAILOUT
The Greek government have announced new austerity measures in a move to unlock new financial aid. It has been over seven years since Greece fell into crisis and it is trying to pull itself together. The government announced tax hikes and pensions cuts in the hope that lenders will release a €7.5 billion bailout on when Euro zone finance ministers meet on Thursday.
To find out more about the bailout and the current economic state of Greece, read Reuters’ analysis.
Despite the economic challenges, stocks in Greek companies have risen 23% this year and hedge funds have been the primary benefactors of this. Bloomberg explores why stocks are up.
3. BARCLAYS FACES £1 BILLION PPI LAW SUIT
It was announced that Barclays faces a £1.1 billion lawsuit over the mis-selling of PPI (Payment Protection Insurance) . This is one of the largest legal claims brought forward relating to PPI. CCUK Finance, a credit card company, is seeking damages over the mis-selling in relation to a lending business it bought from Barclays in 2007. Barclays rejects the claim. (City A.M)
4. UBER TO PAY BACK MILLIONS TO DRIVERS
Uber has announced that it will pay $45 million back to their New York City drivers for erroneously taking too large of a cut from fares. Roughly 50,000 drivers are affected and Uber has stated will pay an average of $900 per driver. This issue here was that Uber took its cut of fares based on the pre-tax figures, rather than after taxes and fees as is required in Uber’s terms of service. It is now seeking to rectify the error. The Independent looks further at this case.
Uber has been at the centre of many controversies and has faced significant challenges since its inception. Earlier this year, a national court in Italy banned the taxi app from operating in the country. Only last week was it allowed again to operate after a court overturned the decision.
5. VODAFONE MERGER
Vodafone finalised a £436 million merger with Maltese telecommunications company Melita. Melita is a broadband and TV operator and will merge with Vodafone Malta. The deal will be subject to approval by Malta’s competition authorities but is likely to be approved. The rationale behind the merger is to create an organisation providing all 4 key telecommunication services; telephone, mobile, broadband, television.
Vodafone has been through a period of significant restructure, most notably the same of its Indian arm last year. Vodafone posted a £5.2 billion loss for 2016 but it is the 2nd largest mobile network provider in the world. (City A.M)
6. GOOGLE PLAN TO TRACK CREDIT CARD SPENDING
Tech giant Google has revealed its plans to track debit and credit card sales in order to gain more accurate details on the success of advertising campaigns. Advertisers will now be able to track how their campaigns generate offline sales.
Google has vast amounts of data on credit card and debit card spending. Google intends to get this information by gathering location information from phones and devices and then ascertaining whether a person has seen an ad then proceeded to buy it at a physical shop. This will help advertisers more accurately determine the effectiveness of their campaigns.
BBC News explores the issues further.
7. PEPSI TO SELL OFF STAKE IN BRITVIC
PepsiCo has announced that it will be selling its 4.5% stake in Britvic as part of its $5 billion cost cutting plan. Britvic is Britvic is the UK’s second largest fizzy drinks manufacturer (2016) , making drinks such as Tango, J2O and Fruit Shoot. It also has a contract with Pepsi. Pepsi hopes to make $85 million from the sale. (City A.M)
8. NEW PAYDAY LOAN REGULATIONS COME INTO FORCE
The latest payday lending regulations came into force on Friday in a strive to protect consumers. The Competition and Market Authority’s (CMA) regulations will now require payday lenders to advertise on at least one price comparison website. The lenders have complained about over regulation and the number of approved loans has fallen by 43%.
In 2015 the Financial Conduct Authority capped all loan repayments at 100% of their original cost. (BBC News)
Payday lending came to prevalence during the financial crisis in 2008 but have faced significant criticism due to their exorbitantly high interest rates. Since then there has been a crack down on the amount people have to pay back and these regulations are just another addition in string of new protective measures.
9. RBS TRIAL
The Royal Bank of Scotland trial due to start last Monday was adjourned to give the parties time to reach a settlement. The legal action was brought forward by investors who claim that RBS misled then over a £12 billion rights issue in 2008. Parties have until 1st of June to inform the judge if they have reached a settlement.
The legal action was initiated by 27,000 but this was reduced to 9,000 over the course of proceedings. (City A.M)
10. CONTACTLESS FRAUD REACHES RECORD HIGH
The amount stolen in fraud cases in UK involving contactless cards reached a record high of £7 million in 2016. This was a 250% increase from 2015 where the amount stolen totalled £2.8 million. This may be argued as a proportionate increase given that spending on contactless payment cards & devices rose from over £7.75 billion in 2015 to over £25 billion in 2016. (BBC News)
While contactless card fraud only accounts for 1% of all fraud cases in the UK as its prevalence dealing with these cases may become more of a priority for authorities.