United Kingdom

The British government unveiled a raft of measures yesterday that it hopes will limit an anticipated spike in unemployment as a result of the coronavirus pandemic, the Associated Press reported. Most noteworthy were a new bonus plan aimed at getting firms to retain workers that have been idle for months, as well as tax cuts for hard-pressed firms in the tourism and hospitality sectors and a new “Eat Out to Help Out” discount scheme. Treasury chief Rishi Sunak said that his latest major intervention is aimed at weaning the U.K.

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Deloitte should be fined a record 15 million pounds ($19 million) for “serious and serial failings” in its audit of technology company Autonomy, a lawyer for Britain’s accounting watchdog told an independent tribunal today, Reuters reported. Deloitte, one of the world’s Big Four auditors, and two of its partners, Richard Knights and Nigel Mercer, were investigated in relation to their audit of Autonomy’s financial statements for 2009 and 2010.

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Travelex said yesterday its debt holders will take control of the company and inject 84 million pounds ($105.60 million) of fresh liquidity, as part of a debt restructuring to help the currency service provider ride out the coronavirus crisis, Reuters reported. The company said that it reached an agreement with at least 66.7 percent of its senior secured noteholders and all of its revolving credit facility lenders for an 84 percent reduction of its existing financial debt. The senior secured noteholders will take full control of Travelex, the company said.

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The U.K. government announced up to $38 billion in fresh stimulus measures intended to boost the country’s economy as it exits lockdown, a path that is also being considered by other rich nations as they seek to prevent the economic shock of the pandemic from snowballing into a multiyear slowdown that could leave deep scars on their societies, businesses and economies, the Wall Street Journal reported.

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A study by Institute for Fiscal Studies warned that thirteen universities, or colleges, in the U.K. are at risk of going bankrupt as the coronavirus pandemic hits their finances and challenges the entire sector, CNBC.com reported. Social distancing measures, travel restrictions and lockdowns have tested the ability of universities to survive without students. In the wake of the pandemic, many moved their teaching online and some do not have plans to return to their facilities until the summer of 2021. There’s also uncertainty as to whether non-U.K.

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Britain has joined forces with India’s Bharti Global to buy the collapsed satellite operator OneWeb, with the two sides pledging $1 billion between them to develop a constellation that could boost broadband and other services, Reuters reported. Under the deal announced on Friday, Britain will invest $500 million and hold a stake of around 45 percent in OneWeb while Bharti will invest the same amount and provide commercial and operational leadership.

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Britain’s Casual Dining Group (CDG), the operator of restaurant chains Cafe Rouge, Bella Italia and Las Iguanas, said on Thursday it had appointed administrators and would permanently close 91 sites immediately with the loss of 1,909 jobs, Reuters reported. The company, which had employed nearly 6,000 people across 250 sites, said the move would enable it to negotiate with landlords ahead of an expected sale of the business.

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British lender Virgin Money will restart a redundancy and branch closure programme that was paused due to the coronavirus crisis, it said on Wednesday, Reuters reported. Virgin Money said it would also press on with rebranding its Clydesdale and Yorkshire Bank branches by January 2021, a plan that was shelved in May. The bank said it would make around 300 redundancies for the time being, 200 fewer than previously planned. It will also close 22 branches and consolidate a further 30, resulting in a total reduction of 52, unchanged from before.

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The sudden fall of Wirecard has triggered a fallout in the wider payments system, as fintech groups move to distance themselves from partnerships they struck with the troubled German company, the Financial Times reported. Wirecard’s crisis has already affected millions of British savers while raising questions about the oversight of technology companies that claim to disrupt payment systems, which have long been the domain of banks and other financial institutions.

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The UK economy shrank more than initially estimated in the first quarter of this year, recording the largest fall since 1979 as coronavirus choked activity in March, with household savings soaring, the Financial Times reported. Output in the UK dropped 2.2 per cent in the first quarter compared to the previous three months, according to revised data from the Office for National Statistics. This is a sharper contraction than the first estimate of 2 per cent. The quarterly fall in UK gross domestic product is now the joint largest since the third quarter of 1979.

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