The week’s news included; Sunak delays petrol & diesel car ban, Microsoft Activision Blizzard deal nearing approval, Game of Thrones author sues ChatGPT, Uber could pull out of EU due to new directive.
Below are our top 10 stories that you need to know about. Be sure to check our twitter page, Facebook page and Instagram 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:
- City A.M – Explainer: Does it matter if Sunak waters down green targets
- BBC News – AI risks destabilising world, deputy PM to tell UN
- City A.M. – Arm’s IPO won’t save us from the ‘valley of death’ Britain’s tech scene is facing
- CNBC – JPMorgan says oil could spike to $150, gets very bullish on energy stocks
- City A.M. – Why investors are sounding the alarm on Sunak’s climate U-turn
1. SUNAK PUSHES BACK PETROL & DIESEL BAN
Rishi Sunak has announced that a proposed ban on the sale of new petrol and diesel cars will be pushed back 5 years. The ban will be introduced in 2035 as opposed to 2030. Sunak also pushed back a ban on gas boilers in new homes from 2025 to 2035. This has faced criticism as it is a key policy of the UK’s net zero strategy.
The move has sparked anger in the automotive industry. Manufacturers have spent billions on electric vehicle investment in order to phase out their petrol and diesel cars by 2030. Now, they may have to consider reintroducing petrol and diesel models for an additional five years. The lack of stability in policy has led automakers like Ford to criticise the move and could cause automakers to think twice before investing heavily in the UK.
Car makers must still however, meet EV quotas to help phase in the new models. From 2024, over 22% of new car sales must be electric. By 2030, this must be 80%. Manufacturers will face a £15,000 pee car fine for failing to meet this quota.
2. MICROSOFT ACTIVISION DEAL NEARING APPROVAL
Microsoft’s revised bid to buy Activision Blizzard is set to be approved by the Competition and Markets Authority (CMA). The CMA had initially blocked the $69 billion deal over concerns it would harm the cloud gaming sector. Microsoft swiftly submitted a new offer after the rejection. Under the revised deal, Microsoft would transfer streaming rights for games from the cloud over to rival publisher Ubisoft. Last week, the CMA said this revised bid “opens the door” to approval. The CMA did express disappointment that this proposal was not put forth from the outset in light of the huge cost and time spent deliberating over the previous deal. The deal has EU approval and the US regulator’s attempt to block it was rejected by the courts. Microsoft is now on track to pull off the deal. The CMA closes its consultation on 6 October.
3. BOE KEEPS RATES STEADY
After 14 consecutive increases, the Bank of England finally agreed not to raise interest rates in the latest MPC meeting. Interest rates were held at 5.25%. This decision was largely driven by a surprise drop in inflation, which fell to 6.7% in August. The Bank of England expects inflation to keep falling although there is still some way to go to reach the Bank’s target rate of 2%. Analysts expect that this will not be achieved until 2025. Only five of nine MPC members voted in favour of keeping rates at 5.25%. Governor Andrew Bailey recognised that high interest rates were hurting the economy due to higher mortgage and borrowing costs. Analysts are not however, predicting rates to fall significantly any time soon. Rather, rates are likely to remain steady until inflation falls substantially.
4. FRASERS FILES TO FORCE MS CEO TO GIVE TESTIMONY
Retailer tycoon Mike Ashley is attempting to force the CEO of Morgan Stanley to provide evidence in court amid his long running dispute with the bank. Ashley’s Frasers Group sued the investment bank for acting in bad faith (see previous top 10) with regards to a $1 billion margin call. Frasers Group is seeking £50 million in damages as the bank “arbitrarily” and “incorrectly” closed out positions on Fraser’s Hugo Boss stock due to “unwarranted speculation” on Frasers Group’s financial standing.
The court case is taking place in the UK, but a New York filing was made last week to force Morgan Stanley CEO, James Gorden, to provide documents and testimony in court. The court case goes to trial in the UK in February 2024.
5. GAMES OF THRONES AUTHOR SUES CHATGPT
Game of Thrones author George RR Martin along with John Grisham are suing Open AI, maker of ChatGPT. They argue that OpenAI used their copyrighted material without permission to train the ChatGPT system. ChatGPT could provide accurate summaries of their books, indicating that the material had been learnt by the system. This constituted “systematic theft on a mass scale” according to the plaintiffs, as the AI system trawled through countless copyrighted works to create its knowledge base. Other authors such as Jonathan Franzen, Jodi Picoult and George Saunders are also named as plaintiffs in the legal action. Commentators say however, the action is unlikely to succeed as the authors would need to prove OpenAI copied and duplicated their work.
There is huge concern in the creative industry among authors, screenwriters and even comedians that generative AI could substantially reduce jobs in the creative field as AI tools learn material and generate new content. AI firms are now facing a plethora of lawsuits over allegedly stolen material.
6. MUSK ANNOUNCES PLANS TO CHARGE FOR X
Elon Musk has announced plans to charge all users a subscription fee for X, formerly Twitter. Musk mentioned that X is still plagued by bots which post spam and harmful content. These bots can be created very cheaply. Putting X behind a paywall, while requiring different payment cards for each account would help combat the “vast armies of bots” according to Musk. No comments were made about the cost of the subscription but Musk said it may be “a small monthly” fee. X’s premium subscription is currently £9.60 per month.
The announcement led to swathes of users saying they would leave the app if X starts charging. X is already suffering with a 60% decline in ad revenue since Musk’s takeover in October as advertisers pulled out (see previous top 10). Despite this, Musk confirmed that X now has a record 550 million monthly users. With a paywall however, this number could plummet. This could also hamper Musk’s plans to create an everything-app.
7. UBER COULD PULL OUT OF EU
Uber has warned that new EU proposals to classify self-employed gig workers as employees could see the company pull out of numerous European countries. The EU’s Platform Work Directive would introduce significant changes to the gig economy. Uber says drivers would be obliged to work specified shifts, accept every job and agree to work exclusively for Uber. This would eliminate the flexibility that attracts many drivers. Up to 70% of its European presence could be withdrawn, according to one of Uber’s top EU bosses. In regions where it continues operating, customers would face longer wait times and prices up to 40% more expensive.
In the UK, a 2021 court ruling held Uber drivers were workers not employees or self-employed. This still grants them flexibility but entitles them to rights such as sick pay and annual leave.
8. EVERTON FC SOLD
Everton Football Club is to be sold to US investment fund 777 Partners for an undisclosed sum. Current owner, Farhad Moshiri, has owned the club since 2016 and holds a 94% stake. His entire holding will be sold to 777. He recognised that the biggest clubs are now owned by private equity giants and state-backed entities, not individual owners like himself. Everton had a tough season last year, narrowly avoiding relegation. It is hoped that the deal with 777 could turn their fortunes around. 777 also owns German club Hertha Berlin, Italian club Genoa CFC and other football clubs around the world. The deal is expected to close by the end of 2023, subject to regulatory approval from the FA, Premier League and Financial Conduct Authority (FCA).
9. HIGH STREETS
UK high streets are in turmoil as almost 2000 independent stores closed in the first half of 2023. Rising interest rates, the end of business rate relief along with the cost-of-living crisis caused overheads to soar and customers to cut back, ultimately making businesses unviable. 1915 independent businesses closed, the highest rate of closure since 2016. Hairdressers fared the worst of all high street businesses, accounting for 441 of the total closure numbers.
Shoplifting has also contributed to the woes of the high street particularly in Scotland. Shoplifting in Scotland is up 21% in the past year. At Co-op stores for example, UK stores have seen a 35% increase in crime in the past year. Bosses have warned the situation is descending into anarchy as less than a third of reported incidents are attended by police.
California is a concerning example of what happens when anarchy takes over. California law classifies theft of merchandise worth $950 or less is just a misdemeanour, which means that the police typically won’t investigate theft, and if they do, offenders are unlikely to face prosecution. This has led to brazen theft en masse and many stores simply pulling out of California as a result. Hoover looks closer at this example.
10. CLIMATE CLAUSES PUBLISHED
Legal charity, the Chancery Lane Project (TCLP) has partnered with US lawyers to create “climate clauses”. These clauses are copyright free and can be freely incorporated into contracts. The clauses cover issues such as renewable and sustainable energy requirements in supply chains, deforestation and much more. Currently 10 clauses have been published. They are exclusively for use under US law. The idea is to bring climate change to the fore in commercial contracts and make inclusion of climate issues into contracts easy and accessible. With net zero on the agenda for businesses and governments alike, normalising higher environmental standards contractually will be crucial in achieving this.