Liz Truss plans to merge City regulators in 'war on technocrats' - live updates

  • In Business
  • 2022-08-18 08:47:46Z
  • By The Telegraph
Liz Truss Tory leadership City financial regulators FCA PRA PSR technocrats - Mark Marlow/EPA-EFE/Shutterstock
Liz Truss Tory leadership City financial regulators FCA PRA PSR technocrats - Mark Marlow/EPA-EFE/Shutterstock  
  • Britain suffers worst inflation in G7 as price surge hits 40-year high

  • Chinese takeover of tech company blocked over security fears

  • FTSE 100 opens 0.3pc lower

  • Ben Wright: The threat of war in Taiwan is an unsustainable risk facing HSBC

  • Sign up here for our daily business briefing newsletter

Liz Truss is said to be planning a major shake-up of City of London regulators in an effort to cut red tape and drive economic growth.

The Tory leadership frontrunner, who is leading rival Rishi Sunak in the latest party survey, is considering a merger of the Financial Conduct Authority, the Prudential Regulation Authority and the Payment Systems Regulator into one new body.

Ms Truss is said to be critical of the FCA and wants to overhaul financial regulation as part of a "wider war on technocrats" and civil servants, the Financial Times reports.

The FCA - the main City watchdog - has come under scrutiny for recent failures including the collapse of mini-bond seller London Capital Finance. It also faced its first ever strike by staff earlier this summer.

The PRA is part of the Bank of England, whose mandate Ms Truss is also planning to review amid criticisms it has been too slow to raise interest rates to tackle soaring inflation.

The PSR - the smallest of the three watchdogs - sits within the FCA.

09:47 AM

430 jobs at risk as supermarket supplier shuts factory

Supermarket fruit and juice business Orchard House Foods is shutting its Gateshead factory, with the loss of up to 430 jobs.

The company, which supplies the likes of Marks & Spencer, Morrisons and Pret A Manger, said it plans to relocate production to its existing base in Corby, Northamptonshire.

Orchard House, which makes prepared and packaged fruit, fruit drinks, fruit jellies, fresh fruit yogurts, compotes and granolas, said the move is part of plans to consolidate production at Corby by the end of November this year.

It comes amid soaring costs for food, energy, labour and transport.

The company said it has "started a consultation process with affected colleagues, with up to 430 jobs at risk of redundancy".

It added that a significant number of jobs will be created in the East Midlands, with support for colleagues from Gateshead who wish to relocate.

09:23 AM

PwC raises UK partner pay to £1m for first time

PwC partner pay £1m - REUTERS/Wolfgang Rattay/File Photo
PwC partner pay £1m - REUTERS/Wolfgang Rattay/File Photo  

PwC partners are now earning £1m on average for the first time thanks to a rebound in consulting work and the sale of part of the company.

The professional services giant said its revenue in the UK and Middle East grew 12pc to £5bn in the year to the end of June.

That was boosted by a 33pc jump in revenue from consulting, which overtook audit to become the group's biggest business area.

PwC said it made its biggest investment in staff pay in a decade, with half of its 24,000 getting a pay rise of 9pc or more.

About 900 partners earned on average £920,000 - up 12pc on the previous year. They earned an additional £105,000 each from the sale of the group's global mobility and immigration business.

09:09 AM

Pound slides against stronger dollar

Sterling has extended losses against the dollar, hitting its lowest level since late July.

The US currency has gained ground after minutes from the Federal Reserve's July meeting pointed to interest rates staying higher for longer to bring down inflation.

The pound fell 0.4pc against the dollar to $1.1995. Against the euro it slipped 0.2pc to 84.66p.

08:54 AM

Chinese takeover of tech company blocked over security fears

Kwasi Karteng China - JEFF OVERS/BBC
Kwasi Karteng China - JEFF OVERS/BBC  

ICYMI - The Government has blocked the takeover of a Bristol-based electronic design company by a Hong Kong rival in a fresh sign of Britain's increasing hostility to Chinese investment.

Giulia Bottaro reports:

Read Giulia's full story here

08:40 AM

FTSE risers and fallers

The FTSE 100 has started the day on the back foot as fears of further interest rate rises continue to weigh on markets.

The blue-chip index was down 0.2pc, with several major stocks traded ex-dividend.

Miner Anglo American fell 3.8pc as it traded without entitlement to its dividend payout. HSBC, asset manager Abrdn and insurer Legal & General all fell between 2.4pc and 4.8pc, weighing on the index.

The FTSE 250 edged up 0.2pc after hitting a one-week low in the previous session.

Among small caps, AO World jumped more than 14pc despite tumbling to a loss, while dropped 9pc after confirming plans for a possible equity raise.

08:24 AM shares drop on share sale plans


Shares in have slumped in early trading after the online furniture website confirmed it's considering selling more shares.

The company said it's looking at a potential equity raise to allow it to strengthen its balance sheet. Shares fell as much as 7.2pc.

Made last month warned its gross sales would be lower than previously expected as Brits cut back on home improvements.

08:12 AM

AO World tumbles to loss as costs surge

AO World loss costs - REUTERS/Carl Recine/File Photo
AO World loss costs - REUTERS/Carl Recine/File Photo  

AO World has crashed to an annual loss after it was hit by the dual impact of rising costs and declining sales.

The white goods retailer posted a pre-tax loss of £37m for the year to the end of March, down from a £20m profit the previous year.

It said the poor performance was partly driven by headwinds from global supply chain disruption, labour shortages and cost-of-living pressures impacting consumer sentiment.

Profitability was also hamstrung by increased staff costs as the company sought to resolve driver shortages.

It's the latest blow for the group, which has seen its shares tumble more than 80pc over the past 12 months after a series of profit warnings.

AO World launched a £40m fundraising round last month and will close its struggling business in Germany as part of an effort to return to profit.

08:02 AM

FTSE 100 opens lower

The FTSE 100 has lost ground at the open as inflation fears continue to grip investors.

The blue-chip index slipped 0.3pc to 7,496 points.

07:50 AM

Recession will force next PM into U-turn, says former BoE official

A looming recession will force the next prime minister to ditch talk about tax cuts and deliver a huge support package to prevent the economy from collapsing.

That's according to former Bank of England official Danny Blanchflower, who said interest rates should be cut now, and probably will be reduced at the end of this year.

While markets are betting on further interest rate rises to tackle surging inflation, Mr Blanchflower said the main focus in the current crisis will have to be either Liz Truss or Rishi Sunak - not the Bank.

He told Bloomberg: "Nothing they've said goes anywhere close to dealing with the problem that's coming. The idea that tax cuts and corporate tax changes are going to help the woman riding on the Mile End Road omnibus is a joke."

Mr Blanchflower also took aim at former colleague Andrew Sentance, who yesterday said interest rates should rise to 3pc or even 4pc this year. He said this following this advice would be "completely disastrous".

07:41 AM

Truss plans City watchdog shake-up

Good morning. 

Liz Truss is said to be considering merging three City watchdogs as part of a broader shake-up of financial regulation.

Under the plans, the Financial Conduct Authority, Prudential Regulation Authority and Payments Systems Regulator would be combined into one new organisation.

The move would form part of a "wider war on technocrats" and civil servants as the Tory leadership frontrunner puts focus on economic growth, the Financial Times reports.

It comes after torrid period for the FCA, which has been criticised for its failings in the London Capital Finance mini-bond collapse and faced its first ever strike earlier this summer.

5 things to start your day

1) Inflation surge threatens Truss's tax cut plans, says IFS  Government's benefits, pensions and borrowing bills expected to soar next year

2) Chinese takeover of tech company blocked over security fears  Kwasi Kwarteng stops acquisition of Pulsic by Super Orange HK

3) Madame Tussauds owner hit with winding up petition in dispute over debt  Merlin Entertainments brands threat by Experian 'wholly inappropriate'

4) Ofgem director quits regulator over price cap  Christine Farnish stands down after accusing watchdog of failing to strike right balance

5) Norway's sovereign wealth fund loses record $174bn after tech bets go wrong  The fund's big bets on technology made a return of minus 27pc

What happened overnight

Asian shares tracked lower this morning, in step with Wall Street's losses.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.2pc, after US stocks ended the previous session with mild losses. The index is up 1.3pc so far this month.

Hong Kong's Hang Seng Index was down 0.5pc while China's blue chip CSI300 was off 0.3pc.

Coming up today

  • Corporate: AO World, Rank (full-year results); Helios Towers, Marshalls (interims)

  • Economics: Inflation final reading (eurozone), jobless claims (US)


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