More support for sterling today: Bank of England governor Mark Carney warned earlier that a UK rate rise will be discussed ‘in the coming months’, though his words carried an expectation of wage increases with them also.
Carney wants to see meaningful improvement in business confidence as well as wage growth – and that combination may take a while, still, to align together. Just before 4pm today sterling was up 1.2% to $1.2968. The euro was also up against the dollar, surging 0.35% to $1.1376.
The FTSE 100 closed down 42 points at 7,392.56. The two major fallers were Burberry and Hargreaves Lansdown, down 3.45% and 2.39%, while IAG and easyJet shares surged 3.8% and 2.3% respectively.
- UK FTSE 100 7,392.56 -0.56%
- Dow 21,431.62 +0.57%
- S&P 500 2,435.12 +0.65%
- Nasdaq 6,183.92 +0.59%
- Nikkei 225 20,130.41 -0.47%
- DAX 12,632.51 -0.30%
- CAC 40 5,248.41 -0.19%
- Gold 1,249.30 +0.18%
- Oil WTI 44.28 +0.09%
Hargreaves Lansdown shares hit
There’s increasing unhappiness about investment charges – and the Financial Conduct Authority (FCA) appears to be taking action, finally. It’s increasingly concerned about the impact of high fees and long-term performance.
“It’s vital,” says FCA chief exec Andrew Bailey, “we help people earn a return on their savings. We need a competitive sector, attracting investment into the United Kingdom which also works well for the people who rely on it for their financial wellbeing.”
The mutterings from the FCA was enough for online broker Hargreaves Lansdown to be hit by a 3% share plunge earlier. Asset managers, both online and off, appear to be in the sights of the FCA. “Despite a large number of firms operating in the market, the FCA’s analysis found evidence of sustained, high profits over a number of years.”
Time for a thorough probe, then.
Co-op hangs onto independence
The Co-op lives to fight another day. The beleagured bank has agreed to a £700m rescue plan from investors and the Bank of England’s Prudential Regulation Authority has rubber stamped the deal.
The cash injection from hedge fund investors also means some relief for the bank’s own pension scheme; £100m will be funnelled into it. It also means the previous 20% stake the Co-op Group held is now cut to close to 1%.
It’s the second rescue for the Co-op Bank following a £1.5bn bank balance hole some six years ago. The move now relieves the Bank of England from having to break up the business and an end to many months of uncertainty for customers and staff. Much of the refinancing deal is a debt-for-equity swap.
Breaking news: Yesterday's cyber hack is widening its victim net with BNP Paribas and French supermarket player Auchan now targeted. Also materials company Saint Gobain.