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Here is a round-up of today’s other news.
JP Morgan Chase has said it misjudged its decision to bankroll football clubs’ failed attempt to create a breakaway European Super League, after a huge backlash from fans and politicians.
The US bank had financed a €3.25bn (£2.8bn) funding package for the plan, which would have seen 15 European teams, including six of the biggest in England, given permanent places in an annual competition.
The Maltese government continues to sell citizenship to multimillionaires who have minimal genuine links to the country, a Guardian undercover investigation has revealed.
Rich applicants are signing €1m deals in return for Maltese passports after a 12-month qualifying period, secret filming suggests, in news that will further alarm Brussels after this week’s leak of documents from one of the world’s largest passport brokerage firms.
FirstGroup has sold the bulk of its North American transport business in a deal worth $4bn, as the transport group looks to focus on its UK bus and rail operations.
The Aberdeen-based FirstGroup has sold First Student, the biggest school-run operator in the US, with about 43,000 yellow buses, and First Transit, which provides outsourced public transport, to EQT Infrastructure.
Dozens of former post office workers have had their convictions for theft, fraud and false accounting quashed by the court of appeal after judges ruled the convictions were due to “corrupt data” from the Post Office’s IT system.
In the latest chapter of one of the biggest miscarriages of justice in English legal history, 39 people who were prosecuted after the Horizon IT system installed by the Post Office and supplied by Fujitsu falsely suggested there were cash shortfalls, had their names cleared on Friday.
And a couple of stories from last night:
Keir Starmer has announced a £30bn plan to revive UK manufacturing by creating 400,000 green jobs.
A small medical ventilator firm has hit out at the apparent special treatment given to the engineering firm Dyson on tax, after it was left unable to sell more than 100 devices built at the request of the health secretary, Matt Hancock.
The Lancashire-based NorVap started building ventilators at the onset of the Covid pandemic in mid-March 2020 after the government called on British industry to join a “ventilator challenge” to help the NHS treat a flood of Covid-19 patients.
We have received a response from Lloyd’s to the climate protests outside its London headquarters at 1 Lime Street in the City of London today, where a pile of black rubble – representing fake coal – was dumped outside the entrance. The insurance market says:
Lloyd’s is committed to accelerating its transition towards a more sustainable insurance and reinsurance marketplace, and has set out specific actions and commitments to align with the goals of the Paris Agreement. We are actively involved in constructive engagement on the issue of climate change and continue to explore the ways in which Lloyd’s can support a responsible transition.
To enable the market to support their customers as they transition their businesses away from fossil fuels, the new standards Lloyd’s have set for the market are targeted and phased. We have asked managing agents to no longer provide new insurance cover for thermal coal-fired power plants, thermal coal mines, oil sands or new Arctic energy exploration activities from 1 January 2022. The target date for phasing out the renewal of existing insurance cover for these types of businesses is 1 January 2030.
However, environmental campaigners are looking for swifter action, particularly in relation to the controversial Adani Carmichael coal mine in Australia. While the ten top Lloyd’s insurers have already ruled out underwriting the mine, Lloyd’s has resisted setting a policy that would exclude other insurers in its marketplace insuring the mine.
In a sign of spreading optimism, Wizz Air plans to fly between 60% and 80% of 2019 levels this summer, as the travel situation is expected to improve on the back of mass vaccination campaigns across Europe, but with some Covid-19 restrictions still in place.
The Hungarian airline’s chief executive Jozsef Varadi made the comment at a virtual aviation conference today.
On the markets, stocks continue to slide, amid a surge in coronavirus infections in India and Japan, and fears over the impact of mooted capital gains tax hikes in the US.
Japan has declared a state of emergency in Tokyo, Osaka and two other cities, in an attempt to combat a jump in infections three months before the Tokyo Olympics is due to open.
You can read more on our coronavirus live blog here:
- UK’s FTSE 100 down 0.4%, or 27 points, at 6,911
- Germany’s Dax down 0.3%, or 47 points, at 15,273
- France’s CAC down down 0.1%, or 6 points, at 6,260
- Italy’s FTSE MiB down 0.2%, or 55 points, at 24,341
Bitcoin has tumbled below $50,000 for the first time since early March and other cryptocurrencies also sold off, haunted by fears that Biden’s tax plans will hold back investment in digital assets. Bitcoin fell 6.8% to $48,166 while small rivals Etherum lost 8.6% to $2,200 and XRP slumped 10%.
Oil prices reversed earlier gains and Brent crude is now down 0.3% at $65.22 a barrel, while US light crude has slipped to $61.4 a barrel.
At the Lloyd’s headquarters in the City of London, 12 climate activists from Insurance Rebellion (a new umbrella group of various environmental movements) used a tipper truck to dump a large pile of fake coal – black rubble – to block the main entrance to the building this morning. Police arrested two people dressed as builders for obstruction of the highway.
At the London insurance market, specialist underwriters and insurance companies, grouped together as syndicates, operate globally, insuring around 40% of the global energy market, including fossil fuels.
Harriet, 28, from Insurance Rebellion, said:
Every day Lloyd’s continues to insure fossil fuel projects we move one step closer to climate breakdown. They are complicit in the destruction of our planet, causing millions of people’s homes to be flooded, burnt to the ground in wildfires, and reclaimed by rising sea levels. Fossil fuel companies can’t run without insurance, so let’s stop insuring them.
The campaigners want to highlight Lloyd’s support for the world’s polluting projects – coal mines, including the highly controversial Adani Carmichael coal mega-mine in Australia. Protesters placed a #Stop Adani sign next to the fake coal.
The ten largest Lloyd’s insurers have ruled out underwriting the Adani Carmichael coal mine, with Tokio Marine Kiln the latest insurer to announce it would abandon “any future underwriting” of the project. However, Lloyd’s has resisted putting in policy that would exclude other insurers in its marketplace insuring the mine, Insurance Rebellion said.
Lloyd’s has been contacted for comment. It has taken some action, setting a market-wide policy in December to stop new insurance cover for coal, oil sands and Arctic energy projects by January 2022, and to pull out of the business altogether by 2030.
However, protesters are calling for more immediate measures, to stop the Adani coal mine going ahead. Hayley Sestokas, an Australian organiser with Frontline Action on Coal, said:
Adani is building its mine on stolen land. The Wangan and Jagalingou people have said no to Adani four times. Australia is already the world’s biggest exporter of coal. If the Galilee Basin is opened up, this would double our output at a time when the world desperately needs to move away from coal to curb runaway climate change. That’s why people from all over Australia are putting their bodies on the line to resist the building of this mine. Lloyd’s need to stop insuring this deadly project. It’s great to see people taking action in London today.
Combined with the strong PMI figures, the bounce in retail sales bodes well for the British economic recovery in coming months.
Dean Turner, economist at UBS Global Wealth Management, says:
With all sectors showing an improvement relative to March, we believe this points to further strength in the economy in the months ahead.
As today’s retail sales numbers signal, consumers and firms stand ready to unleash some of the pent-up demand which has been accumulated in recent months. Encouragingly, the outlook for the labour market continues to improve, with the surveys signalling the fastest rate of job creation since 2017. The news on prices is consistent with the ongoing rise in inflation that we are likely to see in the months ahead. In our view, this will not concern policymakers at the Bank of England too much, but will likely keep them in a hawkish mood.
Ahead of the Bank of England’s meeting in a fortnight’s time, we now have another datapoint confirming that the UK economy is continuing its bounce back. We expect that the Bank will show modest uplift in their growth outlook, which is likely to keep them in a hawkish mood. This, along with the strong recovery, should continue to support sterling, which we expect to trade higher against the euro and US dollar as the year progresses.
Here our story on UK retail sales, which jumped 5.4% in March from the previous month, as Britain’s consumers started to spend more freely even before lockdown restrictions were eased.
People bought more clothes to spruce up their spring wardrobes, went to butcher’s and bakeries at Easter time and purchases plants and garden equipment. There was also notable increase at medical goods retailers, as older people bought mobility equipment such as rollators as they ventured outside more after being vaccinated.
Here is some instant reaction from Rhys Herbert, senior economist at Lloyds Bank.
We now seem to be seeing the first evidence of the release of the pent-up demand that was built up over the many months of lockdown as restraints begin to be lifted.
Rising consumer confidence data suggest that those who have been forced to save during lockdown are now eager to get out there and start spending. Household consumption has, after all, traditionally been the main engine of the UK economy.
Businesses may be more cautious with their spending plans, though the investment incentives laid out in last month’s budget, along with an improving global economy, should help to ensure that they too make a contribution to the economy’s rebound in the months to come.
With the number of people vaccinated rising, this post-lockdown upturn should hopefully be more sustained than the previous ones. That said, the lingering concern remains that a vaccine-resistant Covid-19 variant could stymie the nascent recovery.
Looser pandemic restrictions resulted in the fastest UK private sector growth in April since late 2013, according to the flash estimate from IHS Markit.
- Flash UK Composite Output Index Apr: 60.0, 89-month high (Mar final: 56.4)
- Flash UK Services Business Activity Index Apr: 60.1, 80-month high (Mar final: 56.3)
- Flash UK Manufacturing Output Index Apr: 59.1, 8-month high (Mar final: 56.6)
- Flash UK Manufacturing PMI Apr: 60.7, 321-month high (Mar final: 58.9)
April data compiled by IHS Markit and CIPS showed a strong revival in UK private sector output after the downturn seen at the start of 2021 during the full national lockdown.
Moreover, for the first time since the Covid-19 pandemic began, service activity growth outperformed manufacturing production. This was largely due to a boost from easing government stringency measures regarding some consumer services and non-essential retail in England and Wales from mid-April, with Scotland and Northern Ireland set to follow similar reopening paths by the end of this month.
Bitcoin and other cryptocurrencies have tumbled, with Bitcoin dropping to below $48,000 this morning, amid fears that US president Joe Biden’s plan to raise capital gains taxes will hold back investment in digital assets. This means Bitcoin is down by a quarter from last week’s all-time high.
Bitcoin surged to a record high of $64,895 on 14 April, the day of the launch of the US’s largest cryptocurrency exchange, Coinbase, on Wall Street’s tech-heavy Nasdaq stock exchange.
At the moment, the world’s best-known cryptocurrency is trading at $48,076, down 7% on the day. It’s on track for a 15% loss this week – but is still up 65% since the start of the year, after a strong rally.
Deutsche Bank analyst Jim Reid says:
The cryptocurrency came under fresh pressure on the Biden tax headlines.
Neil Wilson, chief market analyst at Markets.com, adds:
The low tested several times in February at $44,000 is the big support. Basically, it seems to have been bid up on a lot of speculation (even more than usual) ahead of the Coinbase IPO and all this froth has evaporated like a lot of hot air.
There has also been a cluster of regulatory reports and rumours that point to a clampdown and tighter regulation. JPMorgan analysts led by the closely-followed Nikalous Panigirtzoglou say the rollover in prices has been led by a steep liquidation in speculative futures positions. “Momentum signals will naturally decay from here for several months, given their still elevated level,” he says.
Meanwhile, an Australian computer scientist who claims he created bitcoin is taking legal action in the United Kingdom, which could force the court to rule on whether he is indeed the cryptocurrency’s inventor.
London’s high court this week allowed Craig Wright’s lawyers to pursue the operator and publisher of the bitcoin.org website, called Cobra, over what they say is copyright infringement, according to documents filed in court seen by Reuters.
Here is our full story on the UK public finance data. The UK government was forced to borrow a peacetime record of £303bn to combat Covid-19 in the first full financial year of the crisis but the total was lower than originally feared, writes our economics editor Larry Elliott.
Government debt – borrowing that has accumulated over the years – stood at £2.14tn at the end of March, almost 98% of national income.