The week’s news included; Parliament prorogation drama, ECB cuts interest rates to -0.5%, Google pays 1 billion euros to settle French tax fraud case, Topshop posts £500 million loss

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Opinion articles of the week: 

Opinion articles of the week: 

  • BBC News – Can solar power shakeup the energy market?
  • City A.M – The problems caused by superstar CEOs
  • – What are the tax issues arising from companies having to restructure functions and supply chains as a result of Brexit?


Boris Johnson prorogued Parliament last week, shutting down all activity until 14 October. While Parliament is usually on recess during this time for Parliamentary recess. MPs, however, approve a recess, unlike prorogation. Parliament will now be shut until the Queen’s speech in which the government will lay out legislative plans.

Last week, Scotland’s highest civil court ruled that Johnson’s suspension of Parliament was unlawful. The court deemed the government used improperly used the mechanism in order to stifle Parliament and misled the Queen in advising her to approve the prorogation. This court led to calls for Parliament to be immediately reopened but the government said that it will wait until the English Supreme Court decision. In England, the High Court rejected Gina Miller’s attempt to overturn the prorogation as it was deemed “purely political” and “non justiciable”.  

The prorogation was seen as a tactic to block a no-deal Brexit. Parliament is now unable to hold any votes or pass any legislation. The house has however, passed a law requiring Boris Johnson to seek an extension to the Brexit deadline if no deal with EU is approved by Parliament by 19 October. There appears to be no movement on the controversial backstop on the EU side so a deal capable of obtaining parliamentary approval seems unlikely. For now, a no-deal appears to be averted.


The European Central Bank has introduced new stimulus measures including slashing interest rates to an all-time low of -0.5%. The move comes amid increasing fears of recession across the Eurozone as economic growth stutters. The ECB will also reintroduce a quantitative easing package which will see €20 billion a week in government bond purchases. The stimulus package is designed to bring life into the economy and ECB president Mario Draghi urged member states to increase their spending. The ECB said interest rates would remain negative until Eurozone inflation reached 2%. Many members such as France and Germany were furious at the decision. They deemed that the move was premature and disproportionate to the current economic condition.

The Financial Times looks closer at the decision


Google has reached a nearly €1 billion settlement with French authorities over a tax fraud enquiry. The enquiry alleged that Google failed to pay due tax as they failed to declare parts of a business activities in France. The company will pay a €500 million and €465 million in taxes. Google, like many tech giants, reports the vast majority of European sales through Ireland so pay negligible sums in most EU countries. France has sought to implement a digital services tax across the EU but has faced resistance from many countries such Ireland, Denmark and Sweden. Subsequently, France introduced its own digital tax, putting a 3% levy on revenues generated in France where companies own over €750m in annual revenues.


Hong Kong Exchanges and Clearing (HKEX) has made a £32 billion bid for the London Stock Exchange Group. This would be a huge merger that would reshape global capital markets. HKEX exchange is a rival of LSE and the two compete to list shares of the world’s largest companies. The deal would however, require the LSE to drop plans to acquire data firm Refinitiv for £22 billion. Slaughter & May is lead adviser for HKEX on the bid. Analysts are saying however, that the offer for LSE is far too low and will not gain support from investors. HKEX offered around £71 per share, £12 per share less than the offer price. This isn’t the first time the LSE has been involved in merger talks. In 2017, LSE was involved with Deutsche Boerse about a £21 billion merger.


SSE has been sold to Ovo for £500 million, creating the second largest energy supplier in the UK. Ovo will now boast 5 million households up from its existing 1.5 million. There should be no job losses as SSE’s 8000 staff will transfer to Ovo. The deal is expected to be completed within the next few months.

The deal came as no surprise to experts as the recent introduced energy price cap has had a significant impact on the sector. Numerous small energy suppliers have been forced to shut and the bigger firms have been looking to consolidate to mitigate the impact. SSE is the third largest energy supplier and saw earnings drop by 68% in the past year. The firm initially planned to merge with npower last year but later dropped the plans. SSE’s share price rose 2% in response to the deal.


China has exempted 16 US imports from tariffs ahead of upcoming trade talks. Trade talks between the US and China are due to take place later in September. China’s stance has not changed but this could be the beginning of defrosting of trade tensions.

Major US imports such as soybeans and American cars will still be subject to tariffs. There are still over 5000 imports facing tariffs and the US has imposed tariffs on $360 billion worth of goods. Although the exemptions are something of a goodwill gesture, this does little to alleviate the underlying dispute between the world’s largest two economies.


The WeWork IPO has been cast into doubt following a huge dip in its valuation. Japanese investment bank, SoftBank, owns 30% of WeWork, initially valued the office space leasing company at $47 billion. The company has an opaque corporate governance structure and this has raised questions amongst potential investors. In addition, WeWork is another unprofitable unicorn as it has never posted a profit. The company posted a $1.6 billion loss last year. Now the company could be valued lower than $20 billion, a huge blow for Softbank who will have to write down its asset value.

Due to this, SoftBank has urged WeWork to halt IPO plans but the company is determined to keep the show on track. To help alleviate fears, WeWork has announced it would reshape its structure and appoint a independent director and the voting rights of the co-founder will also be slashed. Whether this will be sufficient to prevent another disappointing IPO remains to be seen.

Many analysts fear the IPO could follow the footsteps of Uber’s which was underwhelming. CNBC’s Jim Cramer says the IPO should be halted as it will harm the overall market.


The US is planning to ban the sale of flavoured e-cigarettes following a number of related deaths amongst young people. The FDA is finalising plans to take all e-cigarettes off the market nationally, following Michigan who banned them. In the past year 450 lung related illness have arisen across 33 states where the average age of patients is 19. The concern is that flavoured e-cigarettes are being marketed towards young people and hooking the next generation on nicotine. At the centre of this has been the largest e-cigarette maker Juul.

There has been one death but the precise toxin causing vaping illness is still unknown. More research is underway and stricter regulations will follow.


Topshop has revealed a £500 million for 2018 following declining sales and one-off charges. The company took huge charges from write-downs on value of assets and hefty leases on loss-making stores. Total sales declined by 9% last year to £846.7 million. The largest losses were in Topshop’s UK business where revenue sank by £83 million.

The parent company Arcadia stayed afloat by the skin of its teeth. A rescue deal saved the business but will see the closure of Miss Selfridge and Burton shutting 48 stores. Despite these measures, the company warned fresh funding may be needed to keep the business going. Arcadia also posted a loss of £169.2 million last year.


John Lewis Partnership group posted a £26 million loss in the first half of the year. This is the first ever half year loss reported in its history.  Operating losses tripled to £61.8 million in the period and the company predicts that trading conditions will remain difficult for the remainder of the year. John Lewis is also battling its enormous £2.38 billion debt pile, which it has managed to decrease by 16.4%.

John Lewis subsidiary, Waitrose, performed well which helped offset other parts of the business, as sales increased 14.7% to £110.1 million. John Lewis did however, warned that a no-deal Brexit poses a huge risk to the company and it may be unable to mitigate any negative impact.