British infrastructure projects seeking funds from the European Investment Bank will need to insure the bank against the risks of Brexit, its president said at the weekend, as he warned that Britain’s departure from the EU would damage its ability to fund infrastructure, the Financial Times reported.
Read more
Britain’s consumer borrowing boom may be about to hit a wall. Major banks are now more wary about extending unsecured credit than any time since 2008, shortly after the collapse of Lehman Brothers. According to a Bank of England survey published Thursday, lenders are starting to see an increase in defaults and have tightened the criteria they set for borrowers, Bloomberg News reported. The change comes in the wake of multiple warnings from regulators that the pace of borrowing, with credit growth still running close to 10 percent a year, poses a risk to financial stability.
Read more
Britain’s transport minister said on Monday the costs of bringing home 110,000 customers of airline Monarch, which collapsed last week, were being discussed with credit and debit card companies, Reuters reported. Monarch went bust last week amid intense competition over passengers and a weaker pound following the Brexit vote decimated company profits. It is the largest British airline to collapse and its demise left thousands of customers stranded abroad.
Read more
British trade union Unite said on Wednesday it would launch legal action on behalf of over 1,800 workers who lost their jobs when Monarch Airlines went in to administration earlier in the week, Reuters reported. The airline collapsed on Monday and made 90 percent of the staff on Monarch Airlines and Travel Group redundant after falling victim to intense competition for flights and a weaker pound.
Read more
The head of the U.K.’s Financial Conduct Authority issued a new warning on the levels of consumer indebtedness and called for fresh thinking on how lending is run. With borrowing surging, FCA Chief Executive Officer Andrew Bailey highlighted his growing concern about payday lenders, excessive rates on overdrawn accounts and credit-card debts, Bloomberg News reported. He said that about five million credit-card borrowers are experiencing difficulties paying off their balance, resulting in costs of 2.50 pounds in interest and charges for every one pound of balance they repay.
Read more
Arup, the London-based global engineering company, is being sued in Australia for $2bn by the receivers of a Brisbane toll road that failed because its traffic forecasts proved optimistic, the Financial Times reported. BrisConnections, the company that built a toll road linking Brisbane’s central business district with its airport — which was finished in 2012 — went into administration the following year with debts worth more than $3bn.
Read more
Britain’s Monarch Airlines collapsed on Monday, causing the cancellation of hundreds of thousands of holidays, after falling victim to intense competition for flights and a weaker pound, Reuters reported. The failure of Monarch, the largest British airline to go bust, will affect nearly 900,000 passengers in total. It marooned more than 100,000 tourists abroad, prompting what was billed as the country’s biggest peacetime repatriation effort. Its demise added to turbulence in the European airline industry after Air Berlin and Alitalia filed for insolvency this year.
Read more
Britain’s Serious Fraud Office will charge two former executives of collapsed oil company Afren on Wednesday with alleged fraud over payments they received via secret companies relating to business deals in Nigeria, Reuters reported. The SFO said in a statement former Afren Chief Executive Osman Shahenshah and former Chief Operating Officer Shahid Ullah would appear at Westminster Magistrates Court charged with two counts of fraud and two counts of money laundering.
Read more
The Bank of England said rapid gains in consumer credit could cause U.K. banks to suffer bigger losses than they’re expecting if the economy weakens, Bloomberg News reported. “Lenders overall are placing too much weight on the recent performance of consumer lending in benign conditions as an indicator or underlying credit quality,” the BOE’s Financial Policy Committee said on Monday.
Read more
The man behind the Dyson vacuum cleaner expects the U.K. not to strike a Brexit deal with the European Union. While many consider that a worst-case scenario, James Dyson says those trade conditions “frankly are going to hurt the Europeans more than the British.” Dyson was an ardent backer of the Leave campaign last year and doesn’t see a problem with the U.K. defaulting to World Trade Organization rules when it leaves the bloc in March 2019, Bloomberg News reported. The Malmesbury, England-based Dyson Ltd.
Read more