Britain’s big four banks amassed more than 200 billion pounds ($277.52 billion) of new deposits last year as customers reined in spending through pandemic lockdowns, far outstripping extra lending to struggling businesses and households, Reuters reported. Full-year earnings reported by HSBC, Barclays, Lloyds and NatWest last month revealed the extent to which lenders’ finances have been upended by the crisis. The banks now face a glut in savings, a Reuters analysis of the banks’ results show, as domestic customers of the four lenders deposited 221 billion pounds of extra cash.
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British consumer borrowing fell at its fastest pace in January since May last year as the country went back into a coronavirus lockdown, Bank of England data showed on Monday, Reuters reported. Unsecured lending to consumers fell by 2.4 billion pounds ($3.35 billion), the biggest fall since last May’s 4.6 billion-pound drop and more than a median forecast for a 1.9 billion-pound fall in a Reuters poll of economists. That took the year-on-year fall to 8.9%, the biggest decline since monthly records began in 1994, the BoE said.
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The Insolvency Service paid out £453.4 million in missing wages and benefits to workers at firms that went bust last year, according to new data, the East Ethan Courier reported. The payments made by the agency, which is part of the Department for Business, Energy and Industrial Strategy (BEIS), were at the highest levels in a decade although the various company lifelines provided by the Chancellor meant the number of firms going insolvent fell.
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The U.K. is set to create a 5 billion-pound ($7 billion) grant program to help businesses that have been hard hit by the pandemic, Bloomberg News reported. The ‘Restart’ program will mostly apply to retail, hospitality and leisure -- the industries that have been impacted most by the series of lockdowns imposed in the last year. The plan will be announced Wednesday as part of the release of the national budget, according to a statement from the Treasury department.
Chancellor of the Exchequer Rishi Sunak signaled he’s prepared to raise taxes to fix the U.K.’s battered finances, while also vowing to maintain support for businesses and workers as long as the coronavirus pandemic lasts, Bloomberg News reported. Sunak promised to be “honest” with the public in his budget statement on Wednesday. He said he’ll outline a blueprint to address the budget deficit in a “fair” way -- government advisers project it to reach 19% of gross domestic product.
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The U.K. faces significant challenges in shouldering the burden of regulation it had previously outsourced to Brussels, the government has been warned, Politico reported. A new report by the UK in a Changing Europe think tank says that the fresh autonomy provided to the U.K. by the Brexit trade deal will lead to duplication of many of the EU’s rules. But it finds British regulators may not have enough resources to do the job.
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Britain’s financial regulator on Thursday censured Premier FX, a now defunct company that once operated in Portugal, Spain and Dubai, for “seriously misleading” customers, failing to safeguard their money and for misusing its payment accounts, Reuters reported. The Financial Conduct Authority (FCA) said it would have imposed a substantial fine on the company if it had not already been in liquidation or owed its 136 creditors - most of which are consumers - roughly 9.2 million pounds ($13 million). Premier FX was regulated by the FCA for money transfers.
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Britain will resist “very firmly” any European Union attempts to arm-twist banks into shifting trillions of euros in derivatives clearing from Britain to the bloc after Brexit, Bank of England Governor Andrew Bailey said on Wednesday, Reuters reported. Europe’s top banks have been asked by the European Commission to justify why they should not have to shift clearing of euro-denominated derivatives from London to the EU, a document seen by Reuters on Tuesday showed.
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London-based crypto custody and settlements infrastructure provider Koine has gone into insolvency, CoinDesk.com reported. Koine, whose clients included Bitfinex and brokerage GCEX, was helmed by CEO and chairman Hugh Hughes, the former CEO of Societe Generale Securities. Koine had investment commitments with two parties that were due to provide a total of around £15 million (US$21.2 million) at the end of January, Koine co-founder Phil Mochan told CoinDesk via email. “One of those parties was unable to complete on schedule and so the other party pulled out,” Mochan said.
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Gas-station and convenience-store operator EG Group, owned by British brothers Zuber and Mohsin Issa, is readying another massive debt sale, this time to fund its purchase of the remaining assets of U.K grocer Asda, Bloomberg News reported. EG Group approached investors this week to test appetite for the equivalent of 1.5 billion pounds ($2.1 billion) of high-yield bonds and leveraged loans. The deal, which will be led by Barclays Bank Plc, is expected to launch as soon as this week following EG’s earnings results due Thursday.