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How much savers could be losing out on by not investing their savings, according to research by money app Yolt (City AM, p17).
Andrew Bailey, chief executive of the Financial Conduct Authority (FCA), has warned the government that any agreement on a customs union would do nothing for the UK's financial services industry, reports the Financial Times(£, p3). It is understood that Bailey's comments reflect frustration from the City that the financial services sector has been neglected by the government in its Brexit negotiations. This comes as the Conservatives and Labour attempt to finalise a compromised Brexit deal that could win the support of parliament. However, last night Labour reportedly rejected a proposed deal from Theresa May, with sources claiming it was ?million miles away? from what the party would accept, according to The Times (£, p9).
Meanwhile, wealthy investors in the UK appear optimistic about the impact of Brexit on the economy, according to a survey by UBS Global Wealth Management (Financial Times, £, online only). 41 per cent of respondents believe Brexit will have a positive impact, compared to 35 per cent who think it will be negative. However, the latest spring forecast from the European Commission has predicted that the British economy will slow for a third year in a row, and that business investment in Britain has suffered its worst decline since the financial crisis, reports The Times (£, online only). Uncertainty over Brexit was cited as the main factor behind this decline.
orporate debt has grown to worrying levels in Britain and America, where there is now a greater proportion of highly leveraged businesses than there was before the financial crisis, warns the Bank of England's deputy governor Sir Jon Cunliffe, reports The Times (£, p34). Speaking at the CFO Agenda 2019 yesterday, Sir Jon cautioned that while corporate growth debt had not increased much over the last five years, the riskiness of that debt had risen rapidly. He added that the financial system needs to be prepared for this.
This comes as interest-only mortgages are surging in popularity with commercial landlords across the US, fuelling fears of a return to crisis-era ?loose lending?, reports the Financial Times (£, p13). Interest-only mortgages accounted for 77 per cent of the loans for new commercial mortgage-backed securities in the US during the first quarter. This is the highest level since 2009.
The Financial Conduct Authority (FCA) unveiled proposals yesterday to change the rules around mortgage advice and brokers, after finding its own regulations were damaging competition and people were overpaying for products despite receiving advice, reports the Financial Times (£, p3). Under the FCA's new plans, mortgage brokers who recommend a product that is not the cheapest will have to justify this to customers.
Responding to this development in comments reported in The Times (£, p36) and CityAM (online only), Jackie Bennett, Director of Mortgages at UK Finance, said:
?The FCA's proposals provide helpful clarity on the boundary between execution-only sales channels and mortgage advice.
?This should help ensure that firms can easily provide factual information to borrowers who opt to go through the execution-only route, helping them to choose or switch product quickly and efficiently. It will also support continued innovation, particularly in digital channels.
?The overwhelming majority of new loans are likely to continue being sold under an advised process, during which customers take part in a lengthy interview with the onus being on the lender or adviser to ensure that the mortgage is suitable for the borrower's needs.
?UK Finance will be responding to this consultation in due course and will continue working with the FCA to make it easier for customers to choose the right product for them.?
In today's blog post on how firms need to be well acquainted with the FCA's regulatory priorities if they wish to start proactively driving change.
The government's digital ID system, Verify, has been criticised by the Public Accounts Committee as a failure and not fit for purpose (The Times, £, p2).
Stock markets across the globe have slumped after US president Donald Trump vowed to unexpectedly double tariffs on Chinese goods (BBC News, online only).
Facebook has chosen London to spearhead the push into payments by its WhatsApp messaging service, signalling the social network's commitment to monetising the platform (The Financial Times, £, p1).
Universal basic income trials should be launched across the UK, according to a report by the Progressive Economy Forum which has been backed by shadow chancellor John McDonnell (The Guardian, online only).
John Allan, chair of the CBI, has called for reform of the business rates system, describing the current model as ?uneconomical, unsustainable and frankly unintelligible? (The Times, £, p36).
Martin Wolf, a columnist for the Financial Times (£, p11), details the history of the world's economy and how we are living in an era of unprecedented ultra-low interest rates. He describes how this is a legacy of the financial crisis, which has consequently caused an explosion of debt across the globe. He concludes that this climate has increased the risk of disruption from debt crises and political instability.
Economics editor David Smith writes in The Times (£, p37) that contrary to popular belief, the 2010s have been a remarkably successfully decade for the global economy. He points out that economic growth has averaged at 3.8 per cent in the past ten years, only slightly below its average of 3.9 per cent in the 2000s. Smith argues that this is in part due to the efforts by central bankers, who through ultra-low interest rates and quantitative easing have managed to help avoid a global recession.
For a full list of upcoming UK Finance statistics releases, please click here.
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