Good morning and a happy Friday to you all.
The government today confirmed earlier reports that the bid to takeover Sky by Rupert Murdoch would be referred to the competition authority. Culture Secretary Karen Bradley handed the bid over to the CMA to examine it over concerns about media plurality and broadcasting standards. The CMA has under a year to assess the takeover before handing their findings back to Bradley who will have the final say.
Meanwhile supermarket group Morrisons has reported an almost 5% increase in turnover and has hiked up its dividend for this year. This stands in stark contrast to employee owned John Lewis group where profits have been halved as consumer concerns over Brexit and restructuring costs have taken their toll on its bottom line.
Finally the nation is waving goodbye to the old style, circular, pound coin as it is taken out of circulation next month. The old style coin was first minted in 1983 and is being replaced over concerns it had become far too easy to counterfeit, some estimates put the number of fakes in circulation at 1 in every 30 coins. The public now has until the October 15 to spend or trade in their old coins.
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BoE stokes interest
While an announcement from the Bank of England’s Monetary Policy Committee held interest rates where they are, at 0.25%, there are reports that it is preparing to raise them for the first time in over 10 years. The Banks MPC voted 7-2 to hold rates where they are, a move which initially saw the pound drop in value, however this reversed on the central banks assertion that a rise in interest rates was likely to be necessary in coming months if the economy kept on its current trajectory.
In their statement the Bank said that a majority of MPC members judged that ‘if the economy continues to follow a path consistent with the prospect of a continued erosion of slack and a gradual rise in underlying inflationary pressure then, with the further lessening in the trade-off that this would imply, some withdrawal of monetary stimulus is likely to be appropriate over the coming months in order to return inflation sustainably to target.’ Put simply, if the squeeze on households continues the bank will step into act.
Responding to the Bank of England’s decision to hold interest rates at 0.25% this month, Tej Parikh, Senior Economist at the Institute of Directors said the ‘maintaining the historically low base rate reflects the Bank of England’s willingness to overlook above-target inflation for the sake of the wider economy. As such, it’s a decision the business community very much welcomes.
‘Amidst mixed economic signals, the Bank finds itself on the horns of a dilemma. Indeed, this month’s minutes did strike a more hawkish tone with the suggestion that the stimulus may be reduced sooner than expected.’
An investigation into the Brexit negotiations has been opened by MP’s amid accusations of a lack of progress and strategy from the UK Government. The influential Exiting the European Union Committee which is chaired by Labour MP Hilary Benn will also look at whether the UK team leading talks has the capabilities required to manage the process effectively.
One recent round of talks was halted with Brussels saying the UK was backtracking and the UK blaming a lack of progress on the mandate given to the EU chief negotiated. Last week talks were paused again and today’s announcement from Benn comes ahead of a speech next week from Prime Minister Theresa May in Florence aimed at breaking the deadlock. In his statement launching the inquiry Hilary Benn called the Brexit negotiations the most complex the nation had ever faced and went on to say that ‘they are dealing with fundamental questions about the future of our economy and our country.’
The Prime Minister is due to speak in Florence, once the centre of medieval finance and trade, next Friday and it is being touted by No.10 as a critical point in the UK’s negotiations on exiting the European Union. While scant detail has been released ahead of her keynote there are hopes that she will take the opportunity to put negotiations back on track after a tumultuous few months, as well as giving greater clarity to the issue of the transitional period after the UK formally leaves the EU.
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