This week’s news includes; EU approves Brexit deal, Nissan CEO arrested, Extra Energy collapses and Bitcoin prices continues to slump
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. Get all the important stories and insights straight into your inbox by subscribing to our mailing list here.
Opinion articles of the week:
- BBC News What has happened to Woolworths’ stores 10 years after closure?
- Sky News How major economies are expected to perform in 2019.
- CNN Why Coca-Cola may launch Coke-branded energy drinks
- BBC News Why industry can combat climate change
1. EU LEADERS APPROVE BREXIT DEAL
EU leaders have approved the UK’s Brexit withdrawal agreement. There was concern throughout the week that the summit would have been postponed over Spain’s issues with regards to Gibraltar. These concerns were withdrawn and this decision passes another key hurdle in the Brexit process. The 27 EU leaders approved the deal after less than an hour of discussions.
This decision approves the 585 page draft withdrawal agreement covering terms on which the UK will exit the EU. It also approves the political declaration, the basic outline of what the UK and the EU’s future relationship may be like. The deal must now be approved by the UK Parliament. This is undoubtedly the biggest challenge facing Theresa May. Many MPs, including the DUP who prop up Theresa May’s government, have committed to rejecting the deal. This is the last major hurdle of the withdrawal deal. (BBC News)
EU Commission Donald Tusk has however, issued a stark warning to the UK parliament. He has stated that this deal is the only deal and there will be no renegotiation.
Check out our insight article exploring all the key aspects of the deal.
2. SUPREME COURT BREXIT DECISION
The Supreme Court has rejected the government’s bid to stop the European Court of Justice (ECJ) considering whether the UK can legally reverse Brexit. Scottish politicians had a case referred to the ECJ and will review whether the UK can unilaterally withdraw its notification to leave the EU. The government sought to appeal the case. The government argued against the referral based on the fact that the outcome would be irrelevant as there is no will amongst ministers to reverse the process. The UK Supreme rejected this assertion and confirmed it will allow the ECJ case to proceed.
The ECJ will hear the case on November 27th. This case will provide clarity on the interpretation of Article 50, the clause which triggers the withdrawal process from the EU. Campaigners against Brexit will hope that the ECJ rules that the UK will legally be able to unilaterally remain in the EU. (The Guardian)
3. AMAZON DATA BREACH
Amazon suffered a major data breach last week. The names and email addresses of customers were mistakenly displayed on its website. Amazon claims that this was a technical issue rather than an attack on any of its systems. The issue has since been resolved.
The tech giant has informed all affected customers. No passwords or any other private details were disclosed. While Amazon said users do not need to change their password. IT experts however, claim with email addresses exposed, it would be easy for hackers to gain access to accounts so changes are recommended. (The Guardian)
The Information Commissioner’s Office will need to be informed of any breach and it has said its monitoring the situation. This requirement was introduced by the General Data Protection Regulation. Find out more about the regulation in our insight article.
4. NISSAN BOSS ARRESTED
The chief executive of Nissan, Carlos Ghosn has been arrested for financial misconduct. The Japanese car maker made the announcement also confirming the dismissal of Mr Ghosn. This follows months of investigation into Mr Ghosn’s conduct. In Japan, companies are obligated to disclose the salaries of workers earning over 100m yen (£680,000). The findings showed the CEO allegedly underreported a total of £34 million in salary between 2011 and 2016. In the last financial year Mr Ghosn earned £13.3 million. Nissan has been providing the information to Japanese authorities who will now be taking action. Nissan’s share price fell 10% in response to the news.
Nissan is the sixth largest car manufacturer in the world and turned over $106.1 billion last year. It owns brands such as Mitsubishi and Renault. For more on Nissan’s automotive empire and Mr Ghosn read BBC News’ report.
5. PRICE CAP ON RENT TO OWN
The Financial Conduct Authority has proposed a 100% interest cap on rent to own products. This will affect rent-to-own companies such as Bright House who notoriously charge exceptionally high interest. In some instances, customers can be charged up to 400% of the retail price.
The FCA identified this as a significant social problem. Only a third of rent-to-own customers are in work and the customers in work are on low or insecure wages. Around 300,000 homes use rent-to-own services. The FCA’s new cap is expected to save these customers £22.7 million. The cap will be introduced on 1st April 2019 after an upcoming consultation.
This forms part of a wider clampdown on the rent-to-own industry. Recently, the FCA forced the major companies in sector to pay out £16 million in compensation. It is possible that rent-to-own firms could follow the fate of payday lenders. In 2014, the FCA introduced a 100% cap on payday loan repayments. Four years on, the payday lending industry has declined severely. This decline is best illustrated by the recent collapse of the UK’s largest payday lender, Wonga. (BBC News)
6. FACEBOOK TO APPEAL CAMBRIDGE ANALYTICA SCANDAL
Facebook is set to appeal the fine issued by the ICO over its role in the Cambridge Analytica scandal. A number of third-party apps gathered the data of over 50 million Facebook users between 2007 and 2014. This came to light in March 2018 and Facebook were fined £500,000 by the Information Commissioners office. Facebook now claim that the ICO had no evidence that UK Facebook users were affected by the breach. For full details of the scandal click here.
7. EXTRA ENERGY COLLAPSE
Extra Energy has become the sixth UK energy supplier to collapse in 2018 alone. It has been struggling to attracted customers to stay afloat in an increasingly competitive energy market. Extra Energy only held 108,000 domestic customers. Ofgem has assured customers that they will be appointed a new supplier and energy supplies will be secure. Extra Energy attributed its collapse to the energy price cap “making the market unviable”. The energy company had also received over 1,100 complaints.
There are numerous energy suppliers who all sought riches after the energy market allowed competition. In the first six months of the year, 13 new members entered the market. As of June 2018 there were 68 gas and electricity suppliers in the UK. The energy market is however, dominated by the big six; British Gas, EDF, N-Power, EoN, Scottish Power and SSE. N-Power and SSE are currently in merger negotiations. (BBC News)
8. KPMG LEGAL HIRING SPREE
Professional services giant KPMG has announced that it will double its lawyer headcount within the next few years. KPMG currently employs 1,500 legal professionals globally but has revealed plans to increase that number to over 3000. This would increase KPMG’s global lawyer headcount above four of the five 5 magic circle firms.
All four of the big 4 accounting firms now have ABS licenses. This allows companies to provide legal services without being a law firm. EY has been the most prominent player. Denton’s joined the club earlier this year. KPMG gained its ABS license in 2014. The accountancy giant turned over $26.4 billion in 2017.
9. BITCOIN SLUMP
The price of Bitcoin hit its lowest point since October 2017. Bitcoin has fallen beneath a crucial $5000 resistance point. It had experienced a long period of stability between $6000 and $7000. This is a far cry from its high points. The largest cryptocurrency has fallen 75% from its December 2017 high of £19783. This slump is felt across the whole market, with its capitalisation slumping to just $700 billion.
Many main stream investors fell out of love with cryptocurrency after the hysteria from last year’s hype died down and prices dipped. Blockchain, the core technology behind cryptocurrency however, is still tipped to be revolutionary in all aspects of society.
Check out our insight article explaining what blockchain is and how it works.
10. ADDISON LEE & JLR RECEIVE DRIVERLESS FUNDING
The government has set up a £25 million fund to help the development of driverless vehicles. It is hoped that driverless cars will be on our roads by 2021. This funding will go to a number of automakers and tech firms including Addison Lee and Jaguar Land Rover. Last month, JLR began mapping with its driverless vehicles in Canary Wharf. Addison Lee hopes to launch a self-driving taxi fleet over the next few years. JLR will also launch six driverless vehicles as part of a premium mobility service. In Edinburgh an autonomous bus service is currently in development. (City A.M)