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Half of UK Mortgage Holders Face Rising Payments by 2027 Amid Global Economic Risks, Bank of England Warns
Business

Half of UK Mortgage Holders Face Rising Payments by 2027 Amid Global Economic Risks, Bank of England Warns

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...
PwC introduces ‘managing director’ title to retain employees who are not on track to become partners.
Business

PwC introduces ‘managing director’ title to retain employees who are not on track to become partners.

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...
UK Luxury Cars in Sanctioned Russia Attributed to Illegal Trade, Says Industry Leader
Business, World News

UK Luxury Cars in Sanctioned Russia Attributed to Illegal Trade, Says Industry Leader

The emergence of UK-made luxury cars in Russia, which is currently under sanctions, has been linked to "criminal activity," according to the head of the UK automotive industry’s lobbying organization. Mike Hawes, the chief executive of the Society of Motor Manufacturers and Traders (SMMT), made these remarks after an investigation uncovered a method for transporting vehicles from the UK and other European countries into Russia via Georgia. Video evidence revealed that vehicles, including Range Rovers manufactured in Solihull, were being moved toward the Russian border, despite official statistics indicating that no such trade should be occurring. This situation has raised alarms regarding the adherence of UK car manufacturers to sanction regulations. In response to the Russian ...
Collapse of construction giant leads to 2,200 job losses
Business

Collapse of construction giant leads to 2,200 job losses

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...
PwC, a major UK accounting firm, has been hit with a six-month ban in China.
Asia, Business, World News

PwC, a major UK accounting firm, has been hit with a six-month ban in China.

PwC's Chinese auditing division has been suspended for six months due to its role in auditing the now-collapsed property giant Evergrande. The accounting firm has also been fined over $62 million (£47 million) by Chinese authorities, who accuse it of helping to conceal fraud at Evergrande, which collapsed in January under a massive debt load. PwC China acknowledged that its work fell "unacceptably below" the firm's expected standards and apologized to its clients for the fallout. Authorities claim PwC was aware of "major misstatements" in Evergrande’s financial statements during its audits. In response, China's Ministry of Finance has imposed "administrative penalties" and suspended PwC ZhongTian's auditing services for six months, though its non-audit services remain unaffected. ...
U.S. stocks post their worst week in 18 months amid fears of an economic slowdown.
Business, North America, World News

U.S. stocks post their worst week in 18 months amid fears of an economic slowdown.

U.S. stocks experienced their worst week in over a year, as weak economic data and cautious remarks from central bankers heightened investor concerns about a potential economic slowdown. The S&P 500, Wall Street’s benchmark index, fell 1.7% on Friday, bringing its weekly loss to 4.2%—the sharpest decline since March 2023. Tech stocks were particularly hard hit, with the Nasdaq Composite seeing its steepest weekly drop since January 2022, falling 5.8%, including a 2.6% slide on Friday. The selloff followed disappointing payroll data, as U.S. employers added 142,000 jobs in August, falling short of the expected 160,000 but still above the revised 89,000 jobs created in July. Despite this, the unemployment rate dipped to 4.2%. Further weighing on sentiment were comments from t...
Chinese central bank’s $56bn debt purchase fuels speculation of bond market intervention
Asia, Business, World News

Chinese central bank’s $56bn debt purchase fuels speculation of bond market intervention

China’s central bank made a significant purchase of Rmb400bn ($56bn) in long-term sovereign bonds on Thursday, a move that traders viewed as a potential precursor to directly supporting bond yields in the country's rapidly expanding debt markets. The People’s Bank of China (PBoC) acquired Rmb300bn in 10-year notes and Rmb100bn in 15-year notes from primary dealers. These notes had just been issued by the Ministry of Finance to refinance maturing bonds. Analysts suggest that this action, which effectively removes these bonds from the market, has heightened speculation that the PBoC may soon intervene in the bond market to avert a sharp correction that could lead to financial instability similar to the losses seen with Silicon Valley Bank. Chinese debt has surged this year as glo...
EY reduces pay raises and bonuses for UK tax staff following a slower year.
Business

EY reduces pay raises and bonuses for UK tax staff following a slower year.

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-...
Andrew Bailey of the Bank of England states that the risk of inflation is decreasing.
Business

Andrew Bailey of the Bank of England states that the risk of inflation is decreasing.

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 annuities set for highest sales in a decade
Business

UK annuities set for highest sales in a decade

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...