Pound at highest level since Brexit result

Gertjan Vlieghe said he supported the view, expressed by a majority of the nine-member monetary policy committee (MPC) at Thursday’s meeting, that rates could rise in the “coming months” to help keep a lid on inflation.

In a speech to a conference in London, the economist said: “There remains a risk that, at some stage, the uncertainty surrounding the Brexit process has a larger impact on the economy than we have seen so far.

“If that happens, monetary policy would respond appropriately.

:: The rate rise conundrum behind sterling surge

“But for now, it seems the net effect of the many underlying forces acting on the UK economy is that slack is

continually being eroded and wage pressure is gently building.

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Video:Carney: rate rise possibility ‘increased’

“If these data trends of reducing slack, rising pay pressure, strengthening household spending and robust global growth continue, the appropriate time for a rise in Bank Rate might be as early as in the coming months.”

It was revealed earlier this week that the annual rate of inflation had hit 2.9% in August, with pay growth running at 2.1%.

:: Jobless rate at 42-year low but pay stalls

Much of the increase in inflation can be explained the Brexit vote.

Sterling’s slump against a basket of international currencies following the EU referendum result produced, this year particularly, a steep rise in import costs being passed on to consumers.

Topshop on Oxford Street, London

Video:Cost of fashion pushes inflation to 2.9%

The pound has since recovered some poise – soaring to a high above $1.36 at one stage on Friday and building on gains made after Thursday’s MPC meeting.

It had crashed from $1.50 to $1.32 immediately after the Brexit result was known in June 2016 – before tumbling further to lows below $1.20 earlier this year.

Friday’s surge also saw the UK currency higher versus the euro, trading above €1.12 only weeks after talk grew of looming parity between the two.

Sterling’s strengthening was reflected on the FTSE 100 as big multi-national earners bled market value. The index was down around 1% for a second consecutive day and closed the session at 7215.

Market participants saw the currency strengthening as a realisation that a rate hike was now likely, given that inflation is tipped to hit 3% before next year.

Neil Wilson, senior market analyst at ETX Capital, said: “This does not mean the start of a tightening cycle as we understand them necessarily, but at least a ‘correction’ to the Bank’s cut last August.

“Indeed with sterling now back to more sensible levels it will no doubt raise debate again about whether the Bank should have cut rates given that the collapse in sterling is what’s driving inflation.”

JustGiving targeted by criminals for money laundering
Donation on keyboardImage copyrightGetty Images

Fundraising website JustGiving has said criminals are attempting to use its site to launder money.

The website told the BBC it had shut down nearly 100 of its appeal pages in the past 18 months because it believed they were fraudulent.

It said the public’s willingness to donate money following recent tragic events had been exploited by criminals.

Crowdfunding pages can be set up for free on the site for personal causes, from a memorial fund to a holiday.

Jonathan Waddingham, senior product manager at JustGiving, told BBC Radio 4’s You and Yours programme: “The nature of crowdfunding has changed this year. We think this is because of major events like the Manchester bombing or the fire at Grenfell Tower.

“People are more willing to give to individuals they don’t know, which has meant the risk has changed.”

He said that, in the past two years, the site had needed to work harder to spot and close down fraudulent appeals and prevent criminals from using the donation system to store and “clean” their illegal earnings. However, money laundering “can be easy to spot”, he added.

“The patterns of donation are different from those of legitimate users. One of the things we look out for is where a page gets a lot of donations from the same people or where a card is used repeatedly or has been rejected before,” he said.

When discovered, no payments were processed, he said.

What is money laundering?

Money laundering is the movement and concealment of illegally obtained money, typically by means of transfers involving foreign banks or legitimate businesses.

Det Ch Insp Dave Manley, head of the anti-money laundering unit at City of London Police, said that criminals “do not steal money to have it confiscated later by the authorities”.

“If you take every type of crime where money is involved, the movement of that money is all about making it usable. It is all about taking that money and concealing it, so it appears as legitimately earned, disguising it, converting it and then transferring it.”

Regulation question

Donations made to charities, or raised in the name of a charity, are regulated by both the Charity Commission and the Fundraising Regulator. However, crowdfunding is not completely regulated.

The Financial Conduct Authority (FCA) can regulate some kinds of crowdfunding, such as peer-to-peer lending or if a company is looking to crowdfund a new project. However, money generated for individual causes that are not investment based and do not go directly to a charity are not currently monitored by an independent watchdog.

According to Det Ch Insp Manley, any financial product that moves money is potentially vulnerable.

“The beauty of it is that any individual can set up a page, saying to the world that they are raising money for a particular purpose, but it does not have to be the true reason,” he said.

“There are lots of legitimate good causes that JustGiving help with, but this is a new product and criminals will be looking to exploit that. If it is outside of regulatory powers, then that will be the vulnerability that will be exposed.”

You can hear more on BBC Radio 4’s You and Yours

Staley quizzed again in whistleblower probe

Sky News has learnt that Mr Staley was questioned last week by officials from the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA), following an earlier interview in July.

The reasons for the second meeting with the Barclays chief were unclear on Friday, but City sources described it as “highly unusual” for a subsequent interview to be required.

News of the intensifying inquiry into the Barclays’ chief comes five months after his efforts to unmask a whistleblower triggered yet another damaging investigation into the bank.

:: The central allegation against the bank

The two watchdogs hope to conclude their investigations later this year, and their determination of any sanctions will be closely scrutinised as a test of the new City regime for holding top executives to account.

Mr Staley’s quest to identify the whistleblower – for which he has apologised – has raised renewed questions about Barclays’ commitment to an overhaul of its culture and behaviour after a tumultuous decade.

Mr Staley’s initial interview took place within weeks of four former Barclays executives – including ex-boss John Varley – being charged by the Serious Fraud Office in relation to its multi-billion-pound rescue fundraisings in 2008.

Image:Barclays is facing criminal charges over actions taken during the financial crisis

The whistleblowing probe is focused on both Mr Staley and his responsibilities under the Senior Managers’ Regime introduced after the financial crisis; and Barclays’ systems and controls, and its culture relating to whistleblowing practices.

Mr Staley has hailed the bank’s recent financial results as evidence that a turnaround of the bank is bearing fruit despite the reporting of a statutory loss.

A letter to the board of Barclays last year prompted Mr Staley to seek to identify its author, contravening rules designed to protect whistleblowers’ anonymity.

Despite being told that it was inappropriate to pursue the matter, Mr Staley returned to it several weeks later, when he “honestly, but mistakenly, believed that it was permissible to identify the author of the letter”, according to a statement made by Barclays in April.

A US law enforcement agency was called in to assist with the search, although it ultimately proved unsuccessful.

Barclays said in the spring that its response to the scandal “should be proportionate to its serious nature”, announcing that it would issue a formal written reprimand to its chief executive and reduce his variable pay “very significantly”.

Opinions are divided among Barclays’ leading investors about whether Mr Staley can survive the scandal given the wider questions it raises about the protections afforded to whistleblowers.

Barclays and the FCA declined to comment.

Angry Birds maker Rovio targets $1bn valuation
Angry Birds characters Bomb, Chuck and RedImage copyrightReuters

The mobile games developer behind Angry Birds expects to be worth about $1bn when it lists on the stock market.

Rovio has set a range for its share sale that would value the business at between 802m euros and 896m euros ($960m-$1.07bn; £710m-£795m).

The Finnish firm’s boss, Kati Levoranta, said the listing would help the company expand further.

It is “more than just a gaming company”, she said, with sales from film and merchandising as well.

The Finnish firm expects to list on the main part of the Helsinki Nasdaq on 3 October.

For the year to 30 June, Rovio reported revenues of 265.8m euros, of which 210.1m euros came from games and 55.7m euros from brand licensing.

“The mobile gaming market is expected to grow fast and Rovio has grown faster than the market in recent years,” said Ms Levoranta.

“But Rovio is much more than just a gaming company. Angry Birds branded consumer products are already sold in some 120 counties and the first Angry Birds Movie, released in 2016, was an international box-office success.

“The listing is an important step in developing Rovio into an even stronger games-first entertainment company.”

FTSE 100 falls but Wetherspoon boosted by profits rise
Wetherspoon pubImage copyrightGetty Images

Shares in JD Wetherspoon have jumped 9% after the pub group reported a rise in full-year sales and profits.

In the year to 30 July, profits before exceptional items rose 27.6% to £102.8m with total sales up 4.1% to £1.66bn.

Like-for-like sales – which strip out the impact of pub openings and closures – rose 4%, and are up 6.1% since the start of August.

However, Wetherspoon chairman Tim Martin said the recent pace of sales growth would not continue.

“Comparisons will become more stretching – and sales, which were very strong in the summer holidays, are likely to return to more modest levels,” he said.

Wetherspoon was the biggest riser on the FTSE 250 index, although the index was down 78.91 points at 19,445.03.

The benchmark FTSE 100 index dropped 32.19 points to 7,263.20. Cruise firm Carnival was the biggest faller on the index, down 3.4%, after Credit Suisse cut its rating in the company to “neutral”.

On the currency markets, the pound hit a year-high against the dollar as traders continued to react to Thursday’s comments from the Bank of England which suggested interest rates could rise later this year.

In early trade the pound was up a further 0.25% against the dollar at $1.3432, and was 0.2% higher against the euro at 1.1264 euros.

Brexit: Burberry’s Christopher Bailey sees ‘enormous’ trade potential

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Media captionBurberry CEO Christopher Bailey on Brexit opportunities and why the company suspended investment in Leeds

The potential for UK trade post-Brexit is “enormous”, according to Christopher Bailey, the chief creative officer of British luxury brand Burberry.

But he told the BBC he hoped an anti-immigration climate would not endanger the UK’s “thriving creative culture”.

“Being able to share ideas, to collaborate with people from other cultures and countries, is fundamental to any creative business,” he said.

Mr Bailey was chief executive of Burberry until July.

He returned to a more creative role, handing the chief executive reins to Marco Gobetti.

‘Creatively nourishing’

Asked on the BBC’s Today programme what the potential is for post-Brexit Britain, Mr Bailey said it was “enormous”.

“I think it’s a much smaller world today than it’s ever been in terms of being able to trade,” he said.

“The possibilities and the potential for growth, both locally here in the UK and overseas, is enormous,” he added.

Drawing on Burberry’s experience, he said that “Britishness resonates globally”.

Burberry is considered by many to be the quintessential British brand, thanks to the resilient popularity of its check scarves and trench coats that consumers abroad regard as a classic British look.

Image copyrightReuters

Mr Bailey described London as “an energy hub for the creative industries” and said the UK boasted the best design and art schools, attracting people from around the world.

“We’ve got this creatively nourishing country that people want to feed off,” he said.

When asked whether he thought the political climate towards immigration might pose a risk to that, he said he “desperately” hoped not.

Flying the flag

Burberry has benefited from the weakness of sterling since the Brexit vote with tourists, especially from China, taking the opportunity to shop more cheaply on visits to the UK. The company also manufactures some of its products in the UK, providing another benefit from the weaker pound.

Currently the Far East accounts for nearly 40% of Burberry’s sales. The firm does not publish a breakdown for individual countries.

Carla Busazi, an analyst with trend forecasters WGSN, said Burberry was in a strong position with its focus on exports and its clearly identifiable brand.

“I think it’s good that a brand that flies the flag for Britain sees Brexit as a positive thing. I’m sure there are a lot of fashion brands who are very concerned about what that might mean for them.

“It’s going to be something some British brands are going to struggle with and designer brands who predominantly sell in the UK are going to have challenges ahead.”

Yorkshire on hold

Brexit, and changes in the industry combined with changing consumer behaviour, have created uncertainty for Burberry, Mr Bailey said, resulting in the suspension of a planned £50m investment in Leeds.

Burberry already has two manufacturing sites in Yorkshire, where its trench coats are made, but shortly following the Brexit vote last year the company said it was putting on hold the decision over whether to continue with the new development.

“Since we made that decision and bought that land a lot of things have changed in the world and as any responsible organisation, when you have these big shifts you need to reflect,” said Mr Bailey.

“We are absolutely committed to keeping our manufacturing in this country with our factories in Yorkshire, but with the new site we’re just taking a moment to make sure we understand the ramifications.”

EU chiefs told to take a ‘wise-up pill’ on Brexit

Tim Martin – never one to hold back his opinions on Brussels – used the release of his company’s annual results to urge EU officials to “take a wise-up pill” and recognise they risked scoring an economic own goal in their demands of the UK.

He said: “In the current negotiations, democratically-elected politicians from the UK are dealing with unelected oligarchs from the EU.

“Since the oligarchs are not subject to judgement at the ballot box, their approach is dictated by more sectarian factors – the interests and ideology of EU apparatchiks like them, rather than residents or businesses from EU countries.

“As a result of their current posturing and threats, EU negotiators are inevitably encouraging importers like Wetherspoon to look elsewhere for supplies.

“This process is unlikely to have adverse effects on the UK economy, as companies will be able to switch to suppliers

representing the 93% of the world’s population which is not in the EU, but this evolution will eventually be highly damaging to the economy of the EU.

“Wetherspoon is extremely confident that it can switch from EU suppliers, if required, although we would be very reluctant to initiate such actions.”

The FTSE 250 firm announced record sales and profits for its last financial year – suggesting little harm from a weaker pound raising its import costs.

It reported a 15.6% increase in profit before tax to £76.4m in the 53 weeks to 30 July on sales of almost £1.7bn – up 4% on the previous year.

The company said strong summer trade since the end of its financial year meant that comparable sales were up 6.1% – but it did not expect that performance to continue and its profit expectations for 2017/18 were unchanged.

Shares were up more than 7% when trading opened.

Traffic levels hit record high
CongestionImage copyrightThinkstock

Traffic across Britain has hit record levels, according to the latest provisional statistics from the government.

The biggest rise was in vans, up 3.6% between June 2016 and June this year.

That was followed by car mileage, up 1.3% over the same period. Lorry traffic actually fell in that time, by 1.5%.

These are provisional figures collected from around 200 automatic traffic counters.

The final estimate will not come for another year, after they have added data from people manually counting by the roadside.

Why is it going up?

Britain’s traffic levels actually fell between 2008 and 2012, but they have been rising ever since.

There are three likely reasons. First, the economy has been growing which normally means people drive more.

The population has also been rising, meaning more people own vehicles, and fuel has been getting cheaper.

The government has highlighted statistics that illustrate the trends.

Over the four years since 2013, UK GDP has risen by 9.3%. The population has gone up by an estimated 3% and the price of petrol has fallen by 14.6%.

Over the same period, traffic has increased by 7.7%.

Peak car?

To get the most interesting figures though, you need to transport yourself back 20 years.

Since that time, car mileage has risen by 12.6%. Lorry traffic has gone up by 0.5%. And van traffic has risen by some 69.7%.

So does this data put an end to the idea that we have reached “peak car”? That is, as the name suggests, the theory that our car use has hit a plateau.

Frankly, I am not qualified to answer that, but it is interesting to see how vehicle mileage has bounced back after the recession.

UK could need ‘5,000 more customs officials after Brexit’
UK Border Agency BannerImage copyrightGetty Images

The head of the UK tax agency has said Britain could need up to 5,000 extra staff to handle customs and border checks after Brexit.

HMRC boss John Thompson also said a new customs arrangement with the EU could cost as much as £800m and take seven years to implement.

Speaking before the Treasury Committee, he said HMRC did not have the money at this point to make the changes.

But he said there had been “extensive conversations” with the Treasury.

Mr Thompson said HMRC was investigating the “business case” for a new Singapore-style system, which would allow firms to get their tax and border checks done in one place.

This would bring together 26 different organisations into a “single window”, and make trade “much smoother”.

Image copyrightGetty Images

However, he said the undertaking would be a “mega project”.

“We need to be transparent with you… You need to be thinking about that as a project that costs somewhere between £500m and £800m,” he told MPs.

“It would take five to seven years to implement,” he said.

Avoiding queues

Another HMRC official told the MPs the agency would have to deal with an additional 130,000 new companies after Brexit.

Jim Harra, director general of customer strategy, said these would be firms that import and export within the EU but do not currently come into contact with British customs.

“Based on a crude extrapolation”, he said this would increase customs declarations fivefold, along with staff workload.

“If your customs declarations are multiplied fivefold, if you multiplied your resources fivefold, what would that come out at.

“It would come out at an extra three to 5,000 people,” he said.

Last month the government revealed its “future partnership paper”, which laid out two potential options for customs arrangements after Brexit.

One option would be a new customs partnership with the EU, which would do away with a customs border altogether.

The other would see the UK negotiate agreements with the EU to reduce trade barriers and harness technology to avoid long queues at ports.

‘I want to make life more convenient’

China is reportedly considering plans to eventually ban petrol and diesel cars. With more than 25 million cars sold a year in the country, that’s likely to be popular with makers like Hong Kong startup Thunder Power, which is preparing to sell luxury electric vehicles.

Theo Leggett went to take a look at this week’s Frankfurt Motor Show.