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Wednesday's Business and Politics round-up

10 Oct 2018

Commuters reading daily news on their journey to work

Good morning!

The USA's ambassador to the UN, Nikki Haley, announced she was stepping down yesterday, to the surprise of many (though Donald Trump insisted he knew "six months ago"). Speaking at a press conference, Haley denied that she was considering running for President in 2020, but the timing of her departure may still cause consternation for the administration.

Another sudden departure yesterday came from Aviva's Chief Executive Mark Wilson. The FTSE 100 company said it was "time for new leadership to take the group to the next phase of its development." Mr Wilson meanwhile said, "I am happy I leave the company in a strong position from which it can thrive."

Perhaps less of a shock was the announcement that the Competition and Markets Authority, chaired by Andrew Tyrie, is to launch a review of the auditing sector.

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Bank you for listening

The Bank of England has warned that £41tn worth of derivative contracts could be in jeopardy due to Brexit uncertainty - and that European banks could bear the brunt of any costs of disruption.

London-based clearing houses, which deal with such contracts, currently have EU authorisation. However, this may lapse after Brexit. If those who hold the contracts do have to swap houses, they could incur extra payments.

EU-based firms currently have contracts worth £69tn at UK clearing houses, with £41tn due to mature after Brexit. The European Commission has yet to confirm the short-term contingency measures it would adopt to prevent problems in the event of a hard Brexit.

Meanwhile, German industry figures have warned of a "massive crisis" caused by a no-deal Brexit.

The country's BDI lobby said that German exports to the UK could fall as much as 57 per cent, should tariffs be applied in a hard Brexit scenario. Joachim Lang, managing director of the group, also urged that a transition deal until at least the end of 2020 was essential.

Shots, shots, shots shots shots shots, nobody 

The front page of the Times splashes on the revelations that a third of 16-24 year old spurn drinking alcohol.

The survey of 10,000 young people also found that the proportion who had never tried drinking has doubled over the past decade.

Analysis of the study, published in BMC Public Health, underlined that the "trend is widespread". One researcher said "We find it among higher and lower income gropus, in the north and south, in villages and cities."

In other news, the Daily Telegraph leads with the story that the Royal College of Psychiatrists is reconsidering its opposition to decriminalising cannabis.

Dr Adrian James, who will sit on a newly-formed RCP panel, said they would start with an "open mind", as they review evidence from US states, Portugal, and other places where decriminalisation has taken place.

However, Dr James underlined that he remained wary of the risks of psychosis particularly associated with high-strength forms of the drug.

Gone Google

Google, part of Alphabet Inc - the world's third biggest company - has declared it is not seeking to compete for a contract with the USA's defense department worth up to $10bn.

The contract was to assist the Pentagon with transferring data to a cloud system operated externally, and could last ten years. However, following protests from employees, the giant decided against bidding for it, saying such an engagement conflicted with its corporate values.

A Google spokesperson commented, "We are not bidding on the JEDI [Joint Enterprise Defense Infrastructure] contract because first, we couldn’t be assured that it would align with our AI Principles, and second, we determined that there were portions of the contract that were out of scope with our current government certifications.”

Meanwhile, the company is introducing new 'Pixel 3' handset, which promise an improved camera zoom setting.

But the launch comes in the shadow of the revelations that the data of social medium Google+ users had been exposed.

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