Top stories

  1. Chancellor makes Budget pledges on tech tax, relief for problem debt and business rates
  2. Banks urged to plan for a ‘no-deal’ Brexit
  3. Government to launch Serious and organised crime strategy

Stat of the day

£146,000 – average data breach fine – doubled from this time last year (City AM, p7, £).

Chancellor makes Budget pledges on tech tax, relief for problem debt and business rates

In a measure to be unveiled in today’s Budget, the government is to explore the idea of zero-interest loans to help the millions of people trapped in a cycle of problem debt, often caused by borrowing from payday lenders (The Guardian, online only). The Financial Times (p2, £) also reports that chancellor Philip Hammond will today set a deadline for forcing large tech companies to pay more tax in the UK. While a digital sales tax on tech groups is not expected in the Budget, it is anticipated that there will be a timetable for action to make clear that Britain is willing to act alone if there is no international agreement to tackle the issue.

Following Friday’s news that the chancellor is set to announce a £1.5bn boost to small high street retailers in the Budget (BBC News), The Telegraph (B1, £) reports that Chris Sanger, Global Head of Tax Policy at EY, has also called upon the chancellor to reintroduce tax relief on industrial buildings. Sanger argues that when combined with the reform of business rates, this would give manufacturers incentives to make continuous investment in their companies.

The shadow of Brexit looms large over the Budget however, as Hammond warns that ministers would be forced to review public spending in the case of a ‘no-deal’. Following Mr Hammond’s appearance on yesterday’s Andrew Marr ShowThe Times (p8, £) reports the chancellor’s claim that he would have to tear up his plans for the economy and propose a new settlement in the event of ‘no-deal’ in March. The Telegraph (p1, £) also writes that in such an event the chancellor would hold an emergency Budget and instead use the £13bn worth of “fiscal firepower” from the budget surplus to transform Britain into a low tax, low tariff Singapore-style economy.

Banks urged to plan for a ‘no-deal’ Brexit

Elke König, the head of the eurozone’s Single Resolution Board, has urged UK banks to seriously prepare for a ‘no-deal’ Brexit, saying that lenders should not expect regulators to help them manage any upheaval caused by the UK’s departure. According to The Times (p4, £), Ms Konig warned that there would be no ‘white knight’ to rescue them, and banks should make their own preparations. Amid Brexit insecurities, private equity billionaire Tony Ressler has said that Amsterdam could take over London’s crown as a key financial centre. In an interview with the Financial Times (p16, £),  Ressler says whereas the UK once made up as much as 50 per cent of his firm Ares’ investment in real estate, that would be reduced to 30 per cent for the foreseeable future, with increased spending in the Nordics, France and Germany instead.

Government to launch Serious and organised crime strategy

The Serious and organised crime strategy, which is due to be published on Thursday, will draft in private sector tech firms, accountants and lawyers to help the government combat “high-end money laundering”, according to The Times (online only). According to the article, National Crime Agency statistics show that almost £40bn is laundered through the UK every year. Under the plans, the joint money laundering intelligence taskforce, a partnership with the financial sector set up in 2015, is to be expanded, combining with the National Economic Crime Centre.

Latest from UK Finance

Following the PRA and FCA challenging financial institutions to consider how climate change may impact their business, Carla Sateriale explores green mortgages.

News in Brief

Andrew Bailey, chief executive of the Financial Conduct Authority, has warned that a crash in emerging economies with “debt-sustainability issues” is a risk to the UK financial system as the post-crisis period of low interest rates concludes (City AM, (p13, £).

Chinese banks have started using micro-expression technology in an effort to spot the early signs of fraud in customers’ facial movements (Financial Times, p15, £).

Senior politicians, including shadow chancellor John McDonnell, have called on the London Stock Exchange Group (LSE) to cancel a planned meeting with Saudi officials amid the international fallout from the killing of journalist Jamal Khashoggi (City AM, p3, £).

Jair Bolsonaro, the far-right candidate, has won a sweeping victory in Brazil’s presidential election (BBC News).

Investec economists expect a unanimous vote to keep interest rates on hold when the Bank of England’s rate-setting committee meets on Thursday, according to the Sunday Times (p42, print only).

What the commentators say

Writing in The Times (p41, £), Paul Johnson, director of the Institute for Fiscal Studies, asks will Hammond’s fiscal responsibility win out over his colleagues pushing for a quick win? Johnson contrasts Hammond’s impressive achievement in significantly reducing the record deficit of 2010 through tight budget controls, to the prime minister’s conference declaration of ‘an end to austerity’.

Marshall Billingslea, president of the Financial Action Task Forcehas called for the virtual currency market to be regulated in an effort to tackle organised crime. Billingslea also calls for greater cooperation globally to work with virtual asset providers to strengthen internal controls (Financial Times, p11, £).

Calendar

  • Philip Hammond presents his Budget to cabinet this morning, before making a statement to the Commons at 3.30pm.
  • The Office for Budget Responsibility publishes its economic and fiscal outlook alongside the Budget.
  • Bank of England: Money and Credit stats published
  • Bank of England: Asset Purchase Facility Quarterly report

For a full list of upcoming UK Finance statistics releases, please click here.

News in brief – 29 October 2018