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NatWest: We’ve taken a pretty hard line on crypto
Alison Rose, the head of NatWest bank, says her bank is preventing customers from investing in crypto assets, as part of a crackdown on fraud.
Rose told the Treasury committee that NatWest has “quite strict rules” restricting its customers investing in crypto, and has blocked a number of platforms and exchanges where customers suffered fraud.
“We look at it through a fraud perspective,” Rose told MPs. “We are restricting people investing in crypto because we are concerned.”
She says this policy can frustrate customers who want to invest their own money in crypto.
But, Rose explains:
“We have taken a pretty hard line as a bank on crypto, and we’re blocking retail and wealth customers from transfering into crypto assets because of [concerns over] the volatility and the stability of the platform.”
She reveals that 60% of NatWest customers who fell victim to frauds and scams in the last quarter of 2022 saw them on social media platforms and technology platforms, so the bank is doing its best to combat this “crime against customers” (fraud generally, not just crypto).
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Rishi Sunak’s first cabinet reshuffle since becoming PM in October has implications for the business world and the UK economy.
The BEIS department is being broken up, with the creation of a new Department for Energy Security & Net Zero to be run by Grant Shapps, and a combined Department for Business and Trade this morning, with Kemi Badenoch as its secretary of state.
Delighted to become the first Secretary of State for the new Department for Energy Security & Net Zero. My focus will be securing our long-term energy supply, bringing down bills and thereby helping to halve inflation.https://t.co/1Qd59oCMg8
— Rt Hon Grant Shapps MP (@grantshapps) February 7, 2023
Sunak is also creating a dedicated Department for Science, Innovation and Technology, and refocusing the Department for Culture, Media and Sport to “recognise the importance of these industries to our economy”.
Stephen Phipson, CEO of Make UK, the manufacturers’ organisation says these departments ned to collaborate to develop an industrial strategy.
“Business now needs a period of stability and for the four new departments to work together to create a powerful industrial and energy strategy which delivers a long-term and consistent plan to boost growth and help Britain’s world class manufacturers compete more effectively on the global stage.
“The continued emphasis on science and innovation demonstrates the Government’s commitment to ensuring the UK remains a science super-power but it is critical that we continue the scale up of innovation within Britain’s businesses to boost growth and tackle the UK’s longstanding issues with under investment and productivity. Now the new Secretaries of State must work urgently with business to develop a consistent industrial strategy to ensure buy in from all Government departments and one which is understood to be a priority at national and regional level.”
The UK property sector, meanwhile, is getting another new housing minister, as incumbent Lucy Frazer has been promoted to Secretary of State for Culture, Media and Sport in the reshuffle.
HOUSING is a huge issue for the UK population, yet @RishiSunak is about to appoint the 15th Housing Minister since the @conservatives gained power in May 2010. No wonder no significant progress is being made to fix the housing crisis.
— Paul Day (@PaulDayMK) February 7, 2023
Speaking of savings…NS&I has launched a new issue of its Green Savings Bonds, paying an annual rate of 4.20% over a three-year term.
Money invested in the bonds will help to finance projects as part of the UK Government’s Green Financing Framework.
Projects will include making transport greener, using renewable energy over fossil fuels, preventing pollution, using energy more efficiently, protecting natural resources and adapting to a changing climate.
Savers will need to be prepared to lock their money away for three years, as funds cannot be withdrawn during this time. There is a a cooling-off period in the first 30 days of investment.
The minimum investment in Green Savings Bonds is £100, with a maximum limit of £100,000 per person for each Issue.
Savings giant @nsandi has just launched a new issue of its Green Savings Bonds paying 4.20% interest. Savers putting money in the bonds will help to finance green projects across the UK. Here’s how the new issue compares with deals already available:https://t.co/MSBXzYO6xF
— Vicky Shaw (@ThisIsVickyShaw) February 7, 2023
MPs on the Treasury committee also challenged the bank bosses over complaints from constituents that they are too tardy in passing interest rate increases onto savers.
Labour MP Angela Eagle accused banks of being “ungenerous” on the rates that they offer on instant saver accounts, as the FT report here.
Tory MP and former minister Andrea Leadsom asked lenders whether they relied on the “inertia” of customers and questioned why they did not inform customers on better offers at competitors.
Lenders pointed to products which they said were highly competitive, and spoke about trying to help customers to move into regular saving.
As Dame Alison Rose, Natwest’s chief executive, put it:
“Our digital regular saver which is paying 5 per cent is encouraging people to build that savings habit.”
Barclays UK CEO Matt Hammerstein told MPs that its Rainy Day saver account paid 5%, and suggested that some customers have lost the habit of saving, due to interest rates being so low for so long.
Banks bosses defend branch closures to MPs
Britian’s banking bosses have insisted they remain committed to physical branches, after a string of recent closure announcements which have been criticised by consumer groups and unions.
During today’s Treasury Committee hearing, Ian Stuart, chief executive of HSBC UK, said the bank is “absolutely committed to a physical footprint in the UK”.
He told MPs:
“We think it’s important, but we have to get it scaled properly for the long term.
“Customer behaviours started to change in 1982 with the advent of the cash machine. And it’s been on a journey from that point and it’s speeded up.
“And through the pandemic it accelerated, there’s no question that customers changed their banking behaviours.”
HSBC announced in November it planned to close more than one in four bank branches in the UK.
Dame Alison Rose, chief executive of NatWest Group, said the bank was seeing significant shifts in customer behaviour.
“But we recognise we need to look after all of our customers and make sure that we support particularly vulnerable customers.”
NatWest announced it was shutting another 23 branches in England and Wales in January.
Charlie Nunn, CEO of Lloyds Banking Group [which announced 40 branch closures last month] told MPs:
“We remain very committed to our branch network.”
In December, research from KPMG found that cost of living pressures have increased the number of customers relying on bank branches to help manage their squeezed budgets.
You can’t patent the sun, as polio vaccine developer Jonas Salk pointed out in 1955.
But in the supermarket sector, Tesco and Lidl have begun a High Court fight over a yellow circle logo. The dispute centres on Tesco’s use of a yellow circular loyalty programme logo which Lidl alleges infringes its trade marks for the circular Lidl logo.
PA Media has the details:
German discount chain Lidl says a trademark, and copyright, has been infringed, while Tesco has made a counterclaim.
Lidl uses a yellow circle in its main logo, and Tesco uses one to highlight offers available to members of its Clubcard scheme.
A judge began overseeing a trial at the High Court in London on Tuesday.
Mrs Justice Joanna Smith was shown images of logos, including a yellow circle, surrounded by a red ring, containing the word “Lidl”; a yellow circle, surrounded by a red ring, with no words; and a yellow circle without a red surround and the words “Clubcard Prices” in the middle.
Xi: China will strive to achieve economic improvement
Over in Beijing, president Xi Jinping has pledged that China will work to achieve economic improvement.
Reuters has the details:
China will strive to achieve overall improvement in economic operations, further guide business entities to strengthen confidence and stabilize expectations, state radio cited President Xi Jinping as saying on Tuesday.
The world’s second-largest economy grew 3% in 2022 from a year earlier, badly missing the official target of around 5.5% and hitting one of its worst rates in nearly half a century.
More from the Treasury committee hearing:
HSBC boss Ian Stuart acknowledged how far the mortgage market has come in recent months, from 7% rates in Dec to sub-4% rates today
In December, 60,000 HSBC borrowers were facing 7% rates. ‘If you heard the strain in our customers, the anxiety in our customers was palpable.’— Ruby Hinchliffe (@rubyhinchliffe) February 7, 2023
There are ‘huge public interest questions’ over the UK’s plan to create a digital pound, says Barclays UK CEO Matt Hammerstein.
Asked by the Treasury committee about the plan (announced overnight) to roll out a digital currency by the end of the decade, Hammerstein tells MPs that it could lead to a two-tier system.
Hammerstein told MPs:
Introducing a digital currency that is led by a central bank on behalf of a government runs a risk of creating a two-tier payment system between those who are enabled to be on that digital currency and those who are still wed to cash.
The whols issue of access to cash needs to be resolved, Hammerstein says. He also suggests there is the risk of ‘public hoarding’ of digital cash, which could lead to runs on financial institutions.
On the upside, a digital pound could help to simplify and modernise the plumbing of the payments system to simplify and modernise, but that will take time and is risky, Hammerstein suggests.
Pound drops below $1.20
In the foreign exchange markets, the pound has dropped below $1.20 for the first time in a month.
Read Related Also: Bolsonaro derided for ‘senseless’ challenge to Brazil election he lost last month | Brazil
Sterling has sagged to $1.1983 against the dollar, and is also slightly lower against the euro at €1.1194.
The US dollar’s sharp recovery has not shown any major signs of a reversal yet, says Fawad Razaqzada, market analyst at City Index and FOREX.com, after last Friday’s jump in US employment.
Razaqzada explains that January’s strong employment growth could encourage the US central bank, the Federal Reserve, to keep interest rates high for longer.
Investors are now expecting the Fed to maintain a contractionary monetary policy in place longer than expected in order to dampen inflationary pressures that could arise from a tighter labour market.
This is why we have seen the probability of another 25-basis point rate hike in March rise to almost 100%, while that of another 25 bp hike in May has jumped to 67% from about 40% a week ago.
In contrast, the Bank of England is only expected to make one more quarter-point rate rise, and could reverse that by the end of the year.
NatWest: We’ve taken a pretty hard line on crypto
Alison Rose, the head of NatWest bank, says her bank is preventing customers from investing in crypto assets, as part of a crackdown on fraud.
Rose told the Treasury committee that NatWest has “quite strict rules” restricting its customers investing in crypto, and has blocked a number of platforms and exchanges where customers suffered fraud.
“We look at it through a fraud perspective,” Rose told MPs. “We are restricting people investing in crypto because we are concerned.”
She says this policy can frustrate customers who want to invest their own money in crypto.
But, Rose explains:
“We have taken a pretty hard line as a bank on crypto, and we’re blocking retail and wealth customers from transfering into crypto assets because of [concerns over] the volatility and the stability of the platform.”
She reveals that 60% of NatWest customers who fell victim to frauds and scams in the last quarter of 2022 saw them on social media platforms and technology platforms, so the bank is doing its best to combat this “crime against customers” (fraud generally, not just crypto).
Bank customers face challenges from higher interest rates, MPs hear
Lloyds Banking Group believes that one in ten of its customers face a jump in mortgage costs this year, as they come off existing fixed rate deals.
Charlie Nunn, Lloyds CEO, has told MPs on the Treasury committee that the last year has been very difficult for a number of its customers.
One group Lloyds is concerned about, Nunn explains, is the 10% of customers who will see increased mortgage costs this year as their current fixed-rate mortgage deals end.
About 1% of that group face an increase in interest payments to above 40% of their income, Nunn explains, adding the Lloyds has been ‘laser-focused’ on supporting this group, providing tools and ways to restructuring their debts.
He also says that around 1% of Lloyds customers really can’t make ends meet on a daily basis. The bank, he says, is reaching out to this group, providing tools, support, and advice from debt charities.
Nunn is appearing alongside Matt Hammerstein, CEO of Barclays UK; Ian Stuart, CEO of HSBC UK; and Dame Alison Rose, CEO of NatWest Group.
This is the best remunerated panel to appear before the Treasury committee for some time, remarks chair Harriet Baldwin MP, with the quarter earning over £10m a year between them, the committee’s researchers estimate.
Hammerstein tells MPs that everyone in the UK is facing a period of ‘dynamic adjustment’, due to the increase in interest rates from ultra-low levels.
We’ve got a generation of people that haven’t seen [high] interest rates… even at 4%, [Bank of England] base rate still isn’t at its historic average.
Adjusting from where we were to where we are is causing challenges to people across the spectrum.
HSBC has cut the rate on one of its five-year UK fixed-rate mortgages to below 4%, as the market continues to calm down following turmoil in the autumn.
HSBC UK has reduced a five-year fixed-rate mortgage deal for borrowers with a 40% deposit to 3.99%. The deal has a £999 fee.
It is the first time since September 2022 that a five-year fixed-rate mortgage has been offered by HSBC at a rate below 4%, PA Media reports, adding:
It is only available to homeowners who are remortgaging or those who are switching rates (existing customers rolling off an old deal and on to a new one with HSBC).
The move is part of a wider range of mortgage rate cuts made by HSBC UK on Tuesday.
The average interest rate on five-year, and two-year, fixed-rate mortgages surged over 6% last autumn after the mini-budget caused chaos in the bond market, driving up the yield on UK gilts. Rates have been dropping since, as the financial markets cut their forecasts for how high UK interest rates will peak.
Common Wealth, the think tank, have calculated that BP spent 14 times as much on shareholder payouts over the last year as on capital expenditure on its ‘low carbon’ segment.
Mathew Lawrence, director at Common Wealth, says this – and the plan to invest more in oil and gas – shows the need to reorganise the energy system:
“The pivot back toward oil and gas – and the prioritisation of shareholders over renewable investment – confirms a critical lesson: the for-profit corporation is poorly equipped to deliver the energy transition at the required speed. Its incentives and purpose dangerously misalign with the needs of people and planet.
A successful transition will require reckoning with that fact and acting to reorganise our energy system.”
Today’s results show that BP spent $1.024bn on capital expenditure on low carbon energy (compared to $3.2bn on gas). In contrast, BP shareholders recieved annual dividends worth $4.3bn during the year, and also BP announced over $11bn of share buybacks (a way of returning cash to shareholders).
BP (+3.5%) is pushing the FTSE 100 back towards the record highs set last Friday.
The blue-chip share index has gained 35 points this morning, or 0.45%, to 7871 points. It hit a new alltime high of 7906.58 on Friday afternoon.
Russ Mould, investment director at AJ Bell, says:
“BP may be enemy number one in the public’s eyes for its record profits, but its latest success has helped to drive up the FTSE 100, which in turn will benefit people up and down the country with exposure to UK stocks in their pension,” says
“The UK blue chip index advanced 0.5% to 7,873 with energy companies the key driver, alongside a good showing from banks and pharmaceuticals.
This follows losses on Wall Street last night, where the tech-focused Nasdaq fell 1% and the broader S&P 500 dropped 0.6%.
Mould explains how the prospect of further interest rate increases are moving the markets, following stronger than expected jobs numbers last Friday in the US.
A strengthening labour market theoretically makes it less likely that the Federal Reserve will halt interest rate rises anytime soon.
The Fed needs to see both the jobs market and inflation start to cool before it can justify changing its stance on rates.
“Over the past month or so, investors have become more optimistic that we’re near the top of the rate rise cycle, hence why you’ve seen higher-risk companies do well on the stock market. If this optimism turns out to be misplaced then we’ll likely see investors flock back to sectors where you can typically find value stocks such as banking, energy and tobacco. In a way, today’s movement on the FTSE 100 already reflects this investor thinking.”
The stabilisation in UK house prices in January may be just a ‘blip’, suggests Mike Scott, chief analyst at estate agency Yopa.
Prices may fall again over the next few months. he suggests, although Yopa does expect that house prices will return to growth later this year, though not at the kind of rapid growth rates that we saw from 2020 to 2022.
Scott adds:
Despite last week’s base rate rise to 4%, mortgage interest rates are now falling as market expectations for further base rate rises are easing off. In addition, average earnings increases may be running behind overall inflation, but they are now well ahead of house price growth, and there is still a serious shortage of homes.
All of these factors will drive renewed house price growth once the shock of last autumn’s abrupt interest rises is behind us.
One in five households with prepayment meters have not cashed in their energy vouchers issued to help pay bills.
About one in five people did not redeem the £66 energy support voucher they were sent by PayPoint in November, the company has said this morning.
PayPoint had sent out hundreds of thousands of vouchers in November under a Government support scheme. But only 81% of those vouchers had been redeemed on Sunday when they ran out – 90 days after they were issued.
It means that thousands of households with prepayment meters have missed out on energy bill support that they were entitled to.
Back in December, charities and MPs called on ministers to intervene after it emerged that around 1.3m vouchers for homes with prepayment meters had been either lost, delayed or unclaimed.
German industrial production slides as high energy prices hit economy
Fears of a German recession are swirling again this morning after factory production in Europe’s largest economy fell by more than expected.
German industrial production dropped by 3.1% in December, new data this morning shows, and was 3.9% lower than a year ago.
Production at energy-intensive industries fell by 6.1% during December, month-on-month, as soaring gas and electricity prices continued to hit manufacturers.
This “terrible industrial production report” confirms that Germany’s economy’s came to a “sudden and hard halt in December”, says Carsten Brzeski, economist at ING.
Brzeski warns:
The former growth engine of the German economy is stuttering and no improvement is in sight.
Despite the recent return of optimism as illustrated by improving sentiment indicators, the sharp drop in new orders, the inventory build-up in recent months and the lagged impact of high energy prices all still bode ill for the short-term outlook.
Today’s industrial production was the last hard data for the month of December. It is a month to forget. Retail sales, exports and imports all fell sharply. Either this data will be strongly revised upwards in the coming months or the German economy entered hibernation in December.
Despite the latest optimism reflected in improving sentiment indicators, this economic hibernation is unlikely to end any time soon.
Just when investors were pricing out a Eurozone #recession, data came back with a vengeance.#Germany‘s industrial production was down 3.1% in December, down 6.5% since Dec 2020
Construction output was down 8.0%(!) in December and 19% from its peak in Dec 2020. pic.twitter.com/gKqX3coSvS
— jeroen blokland (@jsblokland) February 7, 2023
