Business

The Bank of England has warned that nearly half of UK mortgage holders could face rising payments over the next three years, with approximately 4.4 million mortgages expected to see increases by 2027. Among these, around 420,000 households could experience monthly hikes of £500. Despite this, about a quarter of borrowers are set to benefit from falling payments, and the Bank noted that households are better positioned to manage mortgage costs than previously anticipated. In its latest Financial Stability Report, the Bank highlighted rising global economic risks, including wars, trade tensions, cyberattacks, and geopolitical instability, which pose "significant" threats to financial stability. Household finances have remained generally resilient, with mortgage arrears and the sh...

Senior PwC staff in the UK who are not on track to become partners will be offered a new "managing director" title, as the Big Four firm aims to retain top employees who are not being admitted to its £1 million-a-year partnership. According to sources cited by the Financial Times, PwC introduced this new role to retain experienced accountants and consultants and attract external talent with higher salaries. However, managing directors will not be eligible for promotion to partner, making it a distinct career track. This move highlights the efforts of Big Four firms to expand their workforces while maintaining the profit pool shared among partners. In recent years, PwC leadership has been under pressure to keep average partner pay near £1 million. This year, PwC’s UK partners earne...

Thousands have lost their jobs after the UK division of global construction giant ISG entered administration. EY, the joint administrators, confirmed on Friday that around 2,200 workers were made redundant immediately. ISG, owned by US firm Cathexis, had been facing financial difficulties for some time. Despite attempts to secure a rescue deal, 200 employees will remain to help with the winding down of the company, which holds over £1 billion in government contracts. ISG’s private sector clients in the UK include major names like Apple, Barclays, and Google. In an internal email widely reported on Thursday, ISG CEO Zoe Price informed staff of the administration filing, expressing regret over the way the news had leaked. She confirmed that staff would still receive their pay on Mon...

EY has implemented smaller pay raises and bonuses for thousands of UK staff and let go of several partners in its tax division as the Big Four accounting firm grapples with a market slowdown. Employees in its 4,400-strong tax advisory unit were informed that they would receive a 2.2 percent base salary increase as part of the annual pay review, sources told the Financial Times. This is a decline from the 6 percent rise in 2023 and the 10 percent increase in 2022. Bonuses in the tax division will also be reduced for the year ending in June, according to recent communications with staff. Additionally, a few tax partners have been dismissed, the sources said. These less generous pay packages reflect how some of the UK’s largest professional services firms are cutting back on year-...

Bank of England Governor Andrew Bailey expressed cautious optimism about inflation on Friday but emphasized that it is "too early to declare victory" following a prolonged period of high price increases. Bailey's remarks, delivered at the Jackson Hole summit of central bankers, were more reserved compared to the stronger stance of Federal Reserve Chair Jay Powell, who stated on Friday that "the time has come" for interest rate cuts in the US. The BoE recently cut interest rates for the first time in four years, lowering its benchmark rate from 5.25 percent to 5 percent. This decision followed a decline in consumer price inflation from a 41-year high of 11.1 percent in October 2022 to the BoE's target of 2 percent in May and June. According to official statistics released last w...

UK sales of individual annuities are on track for their strongest year in a decade, driven by higher interest rates and new financial regulations that are drawing people back to retirement products offering guaranteed income. Insurance companies sold £3.6 billion worth of individual annuities in the first half of 2024, a more than 50 percent increase compared to the same period last year, according to the Association of British Insurers. This surge puts the market on pace for its best performance since 2013—the year before then-Chancellor George Osborne's "pension freedoms" Budget transformed the UK's retirement landscape by reducing taxes on pension withdrawals. The spike in sales was evident in the interim results reported this month by some of the UK's largest insurers. FTSE...