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Anger as scammers go unchallenged – November 11, 2019

An investigation by the Times reveals that Google is making tens of millions from scammers who are using its search engine to lure savers to invest in high-risk or potentially fraudulent schemes. The Financial Conduct Authority (FCA) has issued warnings over six savings websites reported by the newspaper, which is calling for more action to protect the public from web predators.
The Times The Times

Small builders hit by housing market uncertainty – October 12, 2019

Research by Price Bailey has found that more small housebuilders have gone out of business in the most recent 12-month period than at any point since 2015, with 343 lost in the year to September due to stagnating house prices and rises in both raw materials and labour costs. “Subdued activity in London and the South East and falling prices as people defer purchases due to Brexit uncertainty have all taken their toll,” said the firm’s Paul Pittman.
The Times The Sun Yorkshire Post

Second charge lending rises 20% – July 11, 2019

The number of new second charge mortgage agreements rose by 20% year-on-year in September, the Finance and Leasing Association (FLA) has revealed, with lenders agreeing 2,355 over the month, a 20% year-on-year increase, bringing the annual total to 27,092. The value of new business was £105m, up by 18% from September 2018. FLA interim director general Fiona Hoyle says: “The second charge mortgage market reported another month of double-digit growth, with the latest annual new business volumes reaching more than 27,000, a decade-high”, although she added “While the market has returned a strong performance so far in 2019, new business volumes remain well below pre-crisis levels”.
Mortgage Strategy Mortgage Introducer

Auditors questioned over Thomas Cook collapse – July 10, 2019

MPs on the Business, Energy and Industrial Strategy Committee have heard from Thomas Cook’s former auditors. The hearing saw the Committee accuse PwC and EY of being complicit in the failure of the tour operator, questioning why accounts were signed off when the board had been told of risks to the firm’s financial stability and concerns over some accounting practices were raised. Committee chair Rachel Reeves warned that accountancy firms have not shown a “learning curve” from the collapse of several large companies. She added that legislation is needed to deliver tougher regulation as the industry “is not willing to make the changes needed.”
The Daily Telegraph The Times Daily Mail Financial Times The Guardian The I The Independent Daily Star Daily Mirror City AM Yorkshire Post Evening Standard Sky News

PFS in PI insurance warning – June 11, 2019

The Personal Finance Society (PFS) says the Financial Conduct Authority (FCA) and the Treasury need to shake up the professional indemnity (PI) insurance market, with firms seeing premiums soar. The body says while some businesses that offer defined benefit transfers have been quoted a 500% increase in their PI insurance premiums, others have been “unable to secure any ongoing professional indemnity cover whatsoever”. The FCA increased the Financial Ombudsman Service’s (FOS) award limit to £350,000 from £150,000 in April, prompting the PFS to warn that this delivered an instant impact on the cost of PI insurance. Keith Richards, chief executive of the PFS, said the increase – coupled with the possible outcome of the FCA’s supervisory focus – “is driving PI insurers away from the market, restricting access to advice and therefore preventing people from being able to exercise their rights under pension freedoms.”
International Adviser FT Adviser

CBI expects modest growth – March 12, 2019

The latest report from the Confederation of British Industry (CBI) suggests economic growth for the next two years will remain “modest”, at 1.3% this year and 1.2% in 2020 before rising to 1.8% in 2021. The CBI says this is based on an assumption that the UK leaves the EU by 31 January and has “clear line of sight” to a trade deal involving alignment with EU rules. CBI chief economist, Rain Newton-Smith, said: “Transforming a lost decade of productivity will only be possible if supported by a good Brexit deal – one that keeps the UK aligned with EU rules, essential for frictionless trade, along with protecting the UK’s world-beating services sector, which accounts for 80% of our economy.”
The Independent The I Daily Express The Daily Telegraph

HMRC targets online sellers over unpaid VAT – February 10, 2019

HMRC is chasing Amazon, eBay and overseas sellers who use online marketplaces for £585m in unpaid VAT. While some demands have been sent to the large internet firms, in some cases officials have sent VAT bills directly to foreign sellers who market goods to UK buyers. Firms with a turnover of more than £85,000 a year have to register with HMRC and pay VAT of 20% on goods sold online, with rules introduced in 2016 giving the taxman the power to bill online marketplaces if sellers evade tax. The Revenue has contacted sellers over £315m in tax owed, with Amazon and eBay contacted over a further £270m. George Turner, at TaxWatch UK, has called for tougher rules, warning that VAT fraud is “devastating to legitimate British businesses”.
The Mail on Sunday

June sees fall in remortgages

The number of remortgages completed fell in June, according to research conducted by LMS. The number of remortgages fell from 53,624 to 53,516 between May and June. Despite this, the average loan amount rose from £168,259 to £174,685 over the same time frame. The data highlights that the most popular remortgage product in June was five-year fixed rate offerings, with 46% of all remortgages falling under this category.

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Bank of England cuts growth forecasts for UK

The Bank of England has cut its forecasts for UK growth over the next two years. It also warned that a no-deal Brexit would hit the economy and trigger a further drop in the value of the pound. The Bank left interest rates unchanged at 0.75% against a backdrop of weaker global growth and ongoing trade tensions between the US and China. It said the UK economy was expected to grow by 1.3% this year, down from a previous projection of 1.5% in May. The Bank also cut its outlook for growth in 2020 to 1.3%, from a previous projection of 1.6%. The forecasts are based on the assumption that the UK leaves the EU with a Brexit deal – however it suggested growth could be much slower in the event of no deal.

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UK mortgage approvals rise

The number of mortgage approvals hit 66,400 in June, up from 65,650 in May, according to the Bank of England’s latest data, above economists’ expectations and the highest number since January. Howard Archer, an economist at the EY Item Club, said the reprieve from a disruptive Brexit in March, together with better consumer purchasing power and strong jobs growth, had helped, although the “overall benefit has been relatively limited”. Annual lending growth to UK consumers slowed to 5.5% in June, from 5.7% in May, the slowest rate since April 2014.

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Eurozone prepares for interest rate cut

The European Central Bank has hinted it could cut interest rates to tackle a slowdown in the eurozone economy. It said a weak manufacturing sector and uncertainty about Brexit and trade threatened to derail growth in the bloc. The ECB, which kept interest rates on hold on Thursday, said it saw rates at present or lower levels until mid-2020. It is also considering other measures to support the eurozone, including resuming quantitative easing.

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Banks set for biggest mortgage lending period since 2007

High street banks agreed more than £50bn of mortgages to homebuyers in the first half of the year, up 10% on the first six months of 2018 and setting up lenders for their biggest year since 2007, according to data from UK Finance. The loans were offered to almost a quarter of a million homebuyers in the first six months, up 6% on the first half of 2018. The number of mortgages approved for house purchase rose to 42,653 in June, on a seasonally-adjusted basis, up from 42,407 in May and close to April’s two-year high of 42,792. UK Finance said gross mortgage lending in June was 4% lower than the same month last year, at £21.9bn, as a result of a dip in remortgaging. The figures also showed that unsecured consumer credit growth was stable at 4.1%, still well below late 2016 levels of 7.1%. Lenders have become more cautious with customers as a result of actions by the central bank that hav e encouraged them to tighten lending standards.

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Global growth forecast cut by IMF

The IMF has cut its growth forecasts for the global economy for this year and next. It predicts growth of 3.2% in 2019, down from its April forecast of 3.3%. Growth next year is set to pick up to 3.5%, although that is below its earlier forecast of 3.6%. The IMF has raised its growth forecast for the UK this year to 1.3% from 1.2%. The revision for the UK reflects what the report calls a stronger-than-expected first three months of the year, boosted by pre-Brexit stockpiling. However, the IMF’s World Economic Outlook analysis has named a no-deal Brexit among the chief threats to the world economy.

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Long-term mortgages jump in popularity

Analysis by estate agent Ludlow Thompson shows that the number of long term mortgages issued jumped last year, with homebuyers taking out 3,483 mortgages with 40-year terms in 2018, compared with 162 in 2017. The figures show that the number of mortgages issued with terms longer than 25-years climbed 10% between 2017 and 2018, from 455,647 to 499,558. Money Expert cites a Moneyfacts report which found that more than half of all residential mortgage products now offer a maximum term of 40 years, with the number increasing from 1,217 in June 2014 to 2,744 in June 2019.

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Banks assess no-deal threat to SMEs

Banks are assessing the risks a no-deal Brexit poses to small businesses, according to accountancy firms which have been advising banks on their preparations for Britain leaving the EU without a deal in place. The Bank of England (BoE) believes the banking sector is well-prepared for the fallout of an exit from the EU with no deal in place, but it has been suggested that a sudden downturn could hit access to credit for small firms. BoE analysis suggests that 80% of businesses believe they are prepared for a no-deal Brexit but around one in 10 have no contingency plan and did not expect to develop one. SMEs were also deemed more likely to have not prepared for a cliff-edge Brexit.

The Daily Telegraph

Demand for mortgages accelerated in second quarter

Demand for mortgages rose significantly in the second quarter of the year in a sign that the housing market is holding firm amid Brexit uncertainty, according to the Bank of England. In its latest credit conditions survey, a balance of 29.3% of lenders said that demand for mortgages had risen in the past year, compared with 1.8% in the first quarter. Economists said that the figures indicated the avoidance of a disruptive Brexit at the end of March may have provided a boost to housing market activity.

The Times

Mortgage terms and LTVs continue to rise

New research from HSBC has found that the length of mortgage term being taken out by first-time buyers and the loan to value chosen have both increased significantly since the beginning of 2018. Since January 2018 the average mortgage length chosen by first-time buyers has increased by three and a half years, and now sits at 27 years 8 months. First-time buyers are now, on average, taking out mortgages for six years longer than those already on the property ladder and the average LTV for first-time purchases has increased from 72% LTV to 81%. The research also found that the average age people expect to get onto the property ladder is now 39 years old and more than half of those looking to buy their first home already have a family to support.

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UK economy returns to growth

The UK economy grew by 0.3% in the three months to the end of May, according to the Office for National Statistics (ONS). Manufacturing rebounded by 1.4% in May compared to a 4.2% drop the previous month. However, the National Institute of Economic and Social Research said it still expected a fall in GDP of 0.1% in the three months to June as Brexit-related uncertainty takes its toll.

The Daily Telegraph The Times City AM The Guardian The Independent

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British Airways faces record fine for data breach

British Airways is facing a record fine of £183m for last year’s breach of its security systems. The airline, owned by IAG, says it is “surprised and disappointed” by the penalty from the Information Commissioner’s Office (ICO). The ICO said the incident took place after users of British Airways’ website were diverted to a fraudulent site. Through this false site, details of about 500,000 customers were harvested by the attackers, the ICO said. The watchdog said a variety of information was “compromised” by poor security arrangements at the company, including log in, payment card, and travel booking details as well name and address information.

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Productivity dips for third consecutive quarter

Productivity fell for the third consecutive quarter in Q1, with the decline January through March matching the biggest fall since the end of 2015. Figures from the Office for National Statistics show that output dipped 0.2% compared to Q1 2018. This compares to the 0.1% slide seen in the final quester of last year. The manufacturing sector saw productivity decline by 0.9%, while in the services sector a 0.2% increase was recorded.

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