Capital Markets Corporate

September 24, 2021

Our Weekly Newsletter

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Across Instinctif Partners’ Financial Services team, we are always keeping an eye on the key developments taking place across the sector to evaluate their impact on the many businesses we work with. Here we share our picks of the week’s most interesting news, and our expert views.

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UK forced to borrow more than expected as soaring inflation bites 

The UK government was forced to borrow more than expected in August as soaring inflation pushed up debt interest payments. According to the ONS, the government’s budget deficit dropped to £20.5bn in August from £26bn in the same month a year earlier as Britain’s economy recovered from lockdown. However, recent gains from a rebound in tax receipts and lower government spending were offset by inflation, driving up interest payments on the national debt by 84% compared with the same month last year. (From The Guardian, 21st September 2021)

Britain does not need to revise its fiscal rules 

Ahead of next month’s Budget and the unveiling of a new set of fiscal rules by Chancellor Rishi Sunak, it is argued that the proposed constant framework changes will undermine credibility that this is a reasoned approach to fiscal policy. The rules would include a commitment for debt to fall as a proportion of national income before the end of the parliament, also limiting the scope for further increases in spending. (From Financial Times, 20th September 2021)

Treasury consults on changes to IPO process 

The Treasury is currently consulting on changes to the Initial Public Offering (IPO) process that would make it easier for retail investors to buy shares and grow their wealth. While labelled as public, it is noted that large institutional investors are often given priority access to shares, with ordinary investors often buying and selling shares on the secondary market once the company has listed. Economic Secretary to the Treasury John Glen says the Government wants to facilitate wider participation in the ownership of public companies. (This is Money, 18th September 2021)

JPMorgan Chase launches digital bank in the UK

JPMorgan Chase has unveiled its new digital bank offering in the UK, under the Chase brand. It already provides a broad range of financial services to around 60 million American households and its UK proposition includes a current account with a rewards programme offering 1% cashback on all eligible debit card purchases for 12 months. The US banking giant intends to introduce additional banking products in the future, including savings and investment accounts, as well as other lending products. (Money Marketing, 21st September 2021)

NRLA calls for interest-free loans for renters when furlough ends

The government should hand out interest-free loans to private renters who face a potential “cliff edge” as the end of furlough coincides with cuts to benefit support, the National Residential Landlords Association claims. The proportion of private renters in arrears has tripled to 9% from 3% from 2019/20 to the end of last year according to government data, the NRLA report says. The furlough scheme ends on 1st October and coincides with a £20 a week cut to Universal Credit and a continued freeze to housing benefit support. As a result, the association has called on Rishi Sunak to provide interest-free, government-guaranteed hardship loans to support tenants with Covid-related rent debts who are not eligible for benefit support. (Mortgage Strategy, 21st September 2021)

 

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