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Tuesday's Business and Politics round-up

21 May 2019

Person reading a daily news round up on their tablet

Good morning,

A man was arrested yesterday for pouring milkshake over Nigel Farage as the Brexit Party leader was out campaigning in Newcastle.

Paul Crowther claimed there was 'a right of protest against people like [Farage]'. However, the former UKIP chief found support from some perhaps surprising quarters, including Tony Blair.

Meanwhile, the Conservative Party has removed the whip from Lord Heseltine after he stated he would vote for the Liberal Democrats in Thursday's European elections. The party grandee and former deputy PM finds himself at odds with his erstwhile party's policy on - you guessed it - Brexit.

The European elections that might never have been will no doubt continue to shake things up in the week ahead.

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Teching its toll

US stock markets took a hit yesterday, following President Trump's decision to restrict firms' interactions with Huawei.

Tech shares were particularly vulnerable as their exposure to mounting trade tensions between Washington and Beijing became readily apparent. Apple shares were among those affected, falling by 3 per cent, while Qualcomm slid by double that figure.

The US has added Huawei to a list of entities that US firms must have a licence to interact with, leading to Google restricting the Chinese firm's use of its apps. However, the US administration issued a 90 day delay to the ruling coming into effect, to allow for transition.

Huawei's founder was not assuaged, saying the temporary reprieve 'doesn't mean much'. Ren Zhengfei added that 'The current practice of US politicians underestimates our strength', as the firm had prepared for such a scenario occurring.

Going for Gold 

Goldman Sachs has appointed Mazars to be its auditor in Europe, in a first for the banking behemoth.

'Mazars has the opportunity to dispel the myth that only the Big Four are capable of auditing the largest, most complex companies,' says University of Michigan professor Erik Gordon in the FT.

The US firm was complying with EU regulations that mandate auditors cannot remain the same for twenty years, The stipulation applies even to overseas firms that are consider public interest entities.

Goldman's operations in Europe reached nearly $8bn last year. Mazars recorded global revenues of 1.6bn Euros.

The move may have significant bearing on the audit market debate in the UK. One of the proposals of the Competition and Markets Authority's recent audit market study was to enforce joint audits for FTSE 350 firms, roping in one non-Big Four auditor.

Hitting the brakes

Two household name car companies made announcements yesterday underlining the challenges they face.

Ford confirmed that it is set to remove 7,000 jobs worldwide as it aims to cuts hundreds of millions of dollars in annual costs.

The US firm's Dagenham factory is not thought to be affected, according to the Daily Telegraph, however the exact number of British jobs at risk is not yet confirmed. In a memo to staff, chief exec Jim Hackett said, 'To succeed in our competitive industry, and position Ford to win in a fast-charging future, we must reduce bureaucracy.'

Meanwhile UK-based company Jaguar Land Rover swallowed a £3.65bn loss for the year.

The firm, owned by Tata Motors, has had to contend with the decimation of its Chinese market. Revenues fell to just over £24bn as sales in numbers dipped by 6 per cent.

Chief executive Ralf Speth commented, 'We are taking concerted action to reduce complexity and to transform our business through cost and cash flow improvements.' Speth also highlighted that the firm had returned to profit in the fourth quarter.

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