The U.K. economy contracted in the three months through September, as high energy prices and rising interest rates mark the beginning of what policy makers expect will be a long-lasting recession, part of a downturn that is likely to affect much of Europe in the coming months, the Wall Street Journal reported. The country’s gross domestic product was 0.7% lower on an annualized basis in the third quarter compared with the three months through June, the U.K.’s Office for National Statistics said Friday.
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Life doesn’t get much easier for troubled EV maker Arrival: Shares in the Nasdaq-listed, but UK-based, company have continued to slide – falling from $0.42 to $0.38, following a worrying third quarter trading update from the company, capital.com reported. Arrival revealed a loss for the period of $310.3m, compared to a loss of $30.6m in the third quarter of 2021. This Q3 loss in 2022 included non-cash impairment charges and write-offs of $232m. Adjusted EBITDA loss for the period was $73.3m, compared to an adjusted EBITDA loss of $45.9m in third quarter of 2021.
The American owners of Liverpool F.C., one of soccer’s most storied teams, have hired Goldman Sachs and Morgan Stanley to explore a sale of the club, a six-time European champion, according to two people with direct knowledge of the team’s plans, the New York Times reported. Word that Liverpool’s owners are mulling a potential sale comes only months after a group led by the California-based investment fund Clearlake paid a record $3 billion for Liverpool’s Premier League rival Chelsea.
Croydon Council has hired a firm to investigate the leaking of a long-awaited report about the authority’s financial collapse in 2020, MyLondon reported. The Penn Report was completed 18 months ago and was written by Local Government Association’s Richard Penn. He looked into the financial mismanagement of the council before it was forced to issue a Section 114 notice, declaring effective bankruptcy. Despite being completed 18 months ago, the damning report has remained unpublished officially.
British finance minister Jeremy Hunt will seek to fill a 50 billion pound ($57 billion) hole in the country's public finances with around 30 billion pounds of spending cuts and 20 billion in tax rises, two government sources said on Monday, Reuters reported. Hunt is due to present a fiscal statement to parliament on Nov. 17, in a bid to restore financial market confidence after his predecessor Kwasi Kwarteng's Sept. 23 tax cutting plan pushed sterling to a record low against the U.S. dollar and ultimately forced Liz Truss to resign as prime minister.
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Britain's banks were slow to start passing on increases in central bank interest rates to savers and consumers should consider switching to another UK lender, the Financial Conduct Authority said on Monday, Reuters reported. Banks have been quick to pass on higher interest rates to their mortgage customers, but savers are also keen to get better returns after years of record low central bank interest rates. "It was a slow start," FCA Chief Executive Nikhil Rathi told parliament's Treasury Select Committee. "I would also encourage consumers to actively consider switching," Rathi said.
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Improving transparency of 'non-banks' such as pension funds is a first step in applying lessons from turmoil in Britain's government bond market, Bank of England executive director Sarah Breeden said on Monday, Reuters reported. The central bank had to intervene in UK bond markets in September after the 1.6 trillion pound Liability Driven Investment funds (LDI) sector - used by pension funds to help ensure future payouts - struggled to meet collateral calls after the previous government's tax cut plans triggered a market rout.
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The Bank of England’s policymakers raised interest rates on Thursday by the largest amount since 1989, intensifying their battle against inflation even as the central bank predicted that the British economy would enter a “prolonged” recession, the New York Times reported. The bank lifted its key policy rate by three-quarters of a point, ramping up its effort to tighten financial conditions and taking the rate to 3 percent, the highest since November 2008.
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Out-of-pocket creditors have been in a forgiving mood since Covid-19 shuttered businesses in 2020, but that looks to be changing, Bloomberg News reported. A form of legal action in which creditors can apply to have companies shut down and their assets sold to pay debts has become increasingly common. Firms were protected from some forms of creditor action by legislation brought in during the pandemic, but those restrictions ended earlier this year.
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Lending to British consumers rose last month by less than expected and the number of mortgages approved by British lenders eased back, according to Bank of England data on Monday that point to tougher times ahead for Britain's economy, Reuters reported. The BoE said that net unsecured consumer credit rose by 745 million pounds ($861 million) in September, the smallest monthly increase since December 2021, following a 1.215 billion pound increase in August. A Reuters poll of economists had pointed to net lending of just under 1 billion pounds.
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