STAGNANT SERVICE SECTOR ORDERS IMPACT UK ECONOMY

The service sector has seen a decline in new orders for the seventh month this year (The Guardian, p35), according to the IHS Markit Cips purchasing managers? index (PMI), rising slightly to 50.0 last month from September's 49.5 (figure above 50 indicates growth). The sector, which contributes four-fifths of the UK's entire economy, saw the volume of new work continue to fall, with export orders being the worst affected. Analysts have blamed the political climate and prolonged economic uncertainty, with businesses reporting that uncertainty around Brexit has ?undermined international demand for UK-based services?.

This news comes as the UK banking sector's exports of financial services reached a new record high of £36 billion, up £1.7 billion on the previous year, according to figures published by the Office of National Statistics (ONS). Total financial services exports, including banking, also reached a record high of £62.5 billion in 2018, up £3.1 billion on the previous year.

Meanwhile, The i (p38, print only) reports that small and medium-sized manufacturing firms (SMEs) are at their most pessimistic since the Brexit referendum, as they face continued political uncertainty at home and abroad.

NEWS IN BRIEF

The Financial Reporting Council (FPC) is planning to publish summaries of its annual audit quality inspections amid increasing public and political inspection of the auditors' overall role. (The Times, p47 £).

Non-banks now account for a quarter of the institutions offering payment services or payment instruments, according to statistics from the Bank for International Settlements (BIS)  (Finextra, online).

Research by the London School of Economics (LSE) shows capital gains received by individuals taking home more than £100,000 have almost trebled since 2010, while equivalent incomes from salaries have increased by just 20 per cent (The Times, p50, £).

Christmas shoppers are expected to spend an average of £660 this year, an increase from £538 in 2018, while one in four of us will use credit cards to help fund Christmas, according to research from Hargreaves Lansdown (The Daily Mirror, p43 print only).

The cost of the Thomas Cook collapse to government will increase after business secretary Andrea Leadsom announced plans to set up a compensation scheme for customers with outstanding loss of life or serious business claims, as the travel company had been providing personal injury cover without fully insuring against the cost of potential claims (The Times, p50, £).

WHAT THE COMMENTATORS SAY

In The Times, Economic Editor, David Smith, (p43, £) discusses how the Bank of England (BoE) governor Mark Carney will be a hard act to follow as he prepares to leave his role at the end of January 2021. Like or loathe him, Smith argues, Mr Carney's economic record has been solid with inflation averaging between 1.6 and 1.7 per cent (with the exception of Brexit-related distortions in April to June this year) and the banking and financial sectors have strengthened against future crisis under Carney's watch. Dubbed as a ?rock star central banker? Smith concludes that, Mr Carney's replacement will have big shoes to fill.

LATEST BLOGS

Daisy Powell-Chandler, Director, Meyland Strategy, asks whether we should view climate change as a challenge or as an opportunity.

LATEST VIDEOS

Sir Roger Gifford, Chair of Green Finance Institute, discusses the need for climate risk to become a greater consideration in financial portfolios at our Climate Risk, Green Finance and Sustainability Conference today.