The Independent Articles

The UK economy grew by 6.6 per cent in July but the recovery slowed down leaving output substantially below pre-pandemic levels, official data showed.Economists had forecast a 6.8 per cent increase.Gross Domestic Product (GDP) rose for the third successive month but the UK has regained only around half of the output lost during lockdown. The economy is 11.7 per cent below the peak reached before the coronavirus pandemic began, the Office for National Statistics said.Growth was recorded in all major sectors of the economy as lockdown restrictions eased further in July. Construction enjoyed the strongest expansion with output rising 17.6 per cent in July, however it remains 11.6 per cent below February’s level.Watch moreThe production sector, which includes manufacturing, reported output 7 per cent below pre-Covid levels after it grew by 5.2 per cent in July following an increase in manufacturing.The services sector, which makes up almost four fifths of the UK economy, lagged behind, seeing a 6.1 per cent in July, below analysts’ predictions. Education grew strongly as some children returned to school, while pubs, campsites and hairdressers all saw notable improvements.However, the performance of services businesses overall will give cause for concern for ministers given the number of people employed in the sector.Many service sector jobs, such as those in hospitality and leisure, rely on face-to-face contact. With case numbers rising again, the prospect of renewed restrictions is creating uncertainty for many services businesses.The figures do not show the benefit of a popular government scheme to subsidise meals in restaurants which ran in August.ONS director of economic statistics Darren Morgan said: “While it has continued steadily on the path towards recovery, the UK economy still has to make up nearly half of the GDP lost since the start of the pandemic.
“Car sales exceeded pre-crisis levels for the first time, with showrooms having a particularly busy time.
“All areas of manufacturing, particularly distillers and car-makers, saw improvements, while house-building also continued to recover.”
James Smith, research director at the Resolution Foundation think tank, said: “The UK economy continued to rebound over the summer as lockdown restrictions eased.
“But it’s the level of activity that matters, which remains hugely down on pre-pandemic levels.
“More worryingly, the rise in Covid cases and return of public health restrictions means we are coming towards the end of the easy economic wins from restarting activity.
“With emergency support to firms and workers being withdrawn, far tougher times lie ahead this autumn.”

MPs have urged Rishi Sunak to “carefuly consider” an extention to the furlough scheme as well as targeted financial support to prevent job losses in the coming months.
The House of Commons Treasury Committee, which is chaired by Conservative MP Mel Stride, joined a growing chorus of voices including the Labour Party, unions and business leaders that are calling for ministers to consider additional support for jobs.Economists have warned the UK faces a wave of joblessness that could reach levels last seen in  the 1980s unless additional financial help for workers and businesses is provided.
In a critical report, the Treasury committee warned of mass unemployment if the Job Retention Scheme, which covers up to 70 per cent of the salaries of furloughed workers, is not extended beyond its current end date of 31 October, or replaced with other measures.  Mr Stride said the committee was “disappointed” that ministers had not heeded its earlier recommendaion to provide assistance to more than a million people unfairly excluded from government support measures.
Read moreThe MPs also warned that a VAT cut for hospitality and leisure businesses may not be enough to persuade people to soend money in pubs and restaurants.
The chancellor needs to consider whether additional measures to stimulate consumption are warranted at the next Budget, the MPs wrote in their report.
Mr Sunak should also look at increasing Statutory Sick Pay, the MPs said, echoing a recommendation made by the TUC this week. SSP is currently just £95.85 per week, a level which the TUC said would force many workers to choose between their health and paying the bills if they were forced to self-isolate.  Mr Stride sad the committee had sought to focus on the challenges emerging after lockdown, one of which was getting assistance to people and firms who need it most.“The Chancellor should carefully consider targeted extensions to the Coronavirus Job Retention Scheme and explain his conclusions,” he said.“The key will be assisting those businesses who, with additional support, can come through the crisis as sustainable enterprises, rather than focusing on those that will unfortunately just not be viable in the changed post-crisis economy.”“As the committee has said throughout the crisis, the chancellor must continue to show flexibility in his approach. We hope that the Treasury’s unwillingness to implement the recommendations from our first report is not a sign of how it will respond to this one.”The Resolution Foundation’s chief executive Torsten Bell said that the Chancellor needed to reconsider plans to phase out support, and called the committee’s report “essential reading for Treasury officials”.
Read moreHe added: “Extending support for the hardest hit sectors of the economy will be essential to limit the rise in unemployment Britain faces in the months ahead.
“The government will also need to shelve plans to cut back Universal Credit payments to prevent millions of families from suffering a fresh income shock next spring.”TUC general secretary Frances O’Grady said: “MPs from all parties are now urging the chancellor to provide support beyond October, so that businesses with a viable future don’t have to lay off staff.  “The TUC has set out a new plan for a Job Retention and Upskilling scheme supporting short-time work. The Chancellor must act quickly and decisively to put a scheme in place before unemployment surges.”
Mike Cherry, the chairman of the Federation of Small Businesses, said that policymakers should look closely at a potential successor to the Job Retention Scheme.”The priority should be protecting viable small businesses – and all the jobs they provide – that have been disproportionately impacted by the coronavirus crisis, including those caught by local lockdowns, subject to continued national restrictions, or with staff that have directly suffered because of Covid.”
He also called on the Government to take on board the MPs’ suggestions to help company directors and the newly self-employed who have been left out of the support mechanisms so far.

Lloyd’s of London expects to pay out £5bn in claims relating to the coronavirus pandemic, making it the costliest event in the insurance market’s 334-year history.Lloyd’s said on Thursday that the market lost £400m in the first half of the year, compared to a profit of £2.3bn in the same period last year.The 90 members who make up the Lloyd’s market have faced additional claims for event cancellation, travel and business interruption policies.While total payouts this year are expected to hit £5bn, Lloyd’s forecasts that insurers will be able to recover around £2bn of that through their own reinsurance.Read morePayouts will rise further if a court rules next week that more business interruption insurance should cover losses caused by Covid-19.Many businesses believed their insurance covered them for costs caused by the lockdown but have not been able to claim.The Financial Conduct Authority brought a case seeking clarification from a judge on whether insurers should have paid out on certain types of policies.
A ruling in the closely watched case is to be handed down on Tuesday, with many businesses’ survival hanging on the result.  Lloyd’s chief executive John Neal said: “The first half of 2020 has been an exceptionally challenging period for our people, our customers, and for economies around the world.“The pandemic has inflicted catastrophic societal and economic damage calling for unparalleled measures to stifle the spread of the virus, and to get businesses and economies back on their feet.”  The Covid-19 crisis have been more expensive than three disastrous hurricanes in 2017, which cost Lloyd’s $4.8bn (£3.7bn), and the 9/11 attacks in New York, after which Lloyd’s paid out $4.7bn.Excluding the pandemic, Lloyd’s would have delivered an underwriting profit of £1bn, it said.

Scottish-born banker Jane Fraser has been appointed head of Citigroup, becoming the first woman to lead a major Wall Street bank. The 53-year, who enjoys a reputation as a straight talker, will replace Michael Corbat in February. “I have worked with Jane for many years and am proud to have her succeed me,” Mr Corbat said in a statement. “With her leadership, experience and values, I know she will make an outstanding CEO.” Ms Fraser’s elevation had reportedly been anticipated within the banking industry, given her status as a high-flyer who was appointed Citigroup’s president last year. Nevertheless, in an environment that has very few senior women executives, the announcement was widely celebrated. Citigroup also saw its share price rise one per cent as news spread. “Great news for the company and for women everywhere,”  tweeted Bank of America Corp operations and technology chief Cathy Bessant. “A big and fantastic moment.” Ms Fraser said in a statement: “I am honoured by the Board’s decision and grateful to Mike for his leadership and support. The way our team has come together during this pandemic shows what Citi is made of.”Ms Fraser, who was born in St Andrews and studied economics at Cambridge University, first worked at Goldman Sachs in London. Later, she moved to the US and earned an MBA at Harvard Business School.The elevation of Ms Fraser, who is married with two sons, drew attention to the scarcity of women at the highest levels of the banking industry.In addition to Ms Bessant, there is Fidelity Investments CEO Abigail Johnson, JPMorgan’s consumer lending head Marianne Lake and its finance chief Jennifer Piepszak, and Alison Rose, CEO of British bank NatWest.Ms Fraser joined Citigroup 16 years ago and is said to be credited internally with helping the bank recover after the financial crisis, when it had to take $45bn in taxpayer funds to survive.During her career, she has run client strategy in Citi’s investment bank, as well as its private bank, its mortgage business and its operations in Latin America, which accounted for 14 per cent of annual revenue at the end of 2019.Her name was floated last year as a potential CEO candidate at Wells Fargo & Co, before the board settled on former JPMorgan executive Charles Scharf.In October, Ms Fraser was promoted to the role of president and tasked to head its global consumer bank, a move that was widely seen as a precursor to her elevation.Additional reporting by agencies

Amazon’s main UK business saw profits surge by 35 per cent last year but its tax bill increased by just 3 per cent, accounts show.
The company’s warehouse and logistics operation, Amazon UK Services, paid £14.46m in corporation tax in 2019, up from £14.06m the year before. Profits increased to £102m while revenues rose 29 per cent to £3bn.Amazon does not reveal detailed figures for its other UK businesses, including its retail sales or IT services, which are accounted for in Luxembourg.It said sales for the whole UK operation jumped by more than a quarter to £13.7bn
The company has enjoyed bumper sales and profits during the pandemic, taking the wealth of founder Jeff Bezos to more than $200bn, while traditional retailers have been hit hard by lockdown and social-distancing measures.The success of multinational technology companies in recent months has again put the spotlight on methods they use to lower their tax rates and gain an advantage over competitors.
In anticipation of its accounts being filed, Amazon published a blog post defending its record on tax and investment in the UK.
Read moreAmazon said it had invested £23bn in the UK since 2010 and paid £293m in what it defined as “direct taxes”, including  business rates, corporation tax and stamp duty.“When you talk to ordinary people it’s clear they are fed up with the kind of clever accounting companies like Amazon get away with,” said Robert Palmer, executive director of Tax Justice UK.  “Politicians need to finally fix the way we tax big multinationals and not cave-in to pressure to water down the rules.”Tax Justice UK’s research shows found a majority of people across the political spectrum want to see taxes on wealth increased.
Among Labour voters, 88 per cent supported higher wealth taxes while among Conservative supporters the figure was 64 per cent.
The report found “near universal” anger at tax avoidance by multinational corporations and wealthy individuals.More that four in five people said it was morally wrong for companies to avoid tax, while 76 per cent said the same about tax avoidance by individuals.Amazon said in a statement: “The UK has now become one of Amazon’s largest global hubs for talent and this year we announced plans to create 10,000 new jobs in the country by the end of 2020.”  “We pay all taxes required in the UK and every country where we operate, and focusing on one small piece does not provide a full picture of Amazon’s overall contribution to the UK.  “Corporation tax is based on profits, not revenues, and our profits have remained low given retail is a highly competitive, low-margin business and we continue to invest heavily.”

Pizza Hut has announced plans to shut 29 of its 244 UK restaurants, putting around 450 jobs at risk.The restaurant chain is in talks with creditors over a turnaround deal after facing “significant disruption” from the pandemic.Pizza Hut said on Wednesday that it was forced to restructure because sales are not expected to fully recover until “well into 2021”.Pizza Hut Delivery or related franchises will not be affected by the job cuts. The company is the latest high street dining brand to announce redundancies since the pandemic began in March. Costa, Zizzi, Pret a Manger, Chiquito and Burger King are among those making cuts as millions of people cut back on eating out.A popular government scheme offering half-price meals came to an end last week and fears are growing that hospitality businesses will cut tens or even hundreds of thousands of jobs over the winter as the industry enters a quieter period of the year and government support for wages is withdrawn.Read moreA Pizza Hut Restaurants spokesperson said: “We are committed to doing the right thing, and in order to secure as many jobs as possible and continue serving our communities, we are working to reach an agreement with our creditors.”While we are likely to see 29 Hut closures and 450 job losses, any measures we take aim to protect about 5,000 jobs at our remaining 215 restaurants, as well as the longevity of the business.
“We understand this is a difficult time for everyone involved. We appreciate the support of our business partners and are doing everything we can to help our team members during this process, including speaking with those affected by the consultation.”

Investors who put their savings into collapsed mini-bond firm London Capital & Finance (LCF) expressed relief on Tuesday after a court ruling meant they may be entitled to compensation that regulators had denied them.A judge ruled that a judicial review could go ahead into the Financial Services Compensation Scheme’s (FSCS) decision not to cover the losses of thousands of LCF investors. The judge rejected the FSCS’s request for the case to be dismissed.Investors said they now saw “light at the end of the tunnel” after a two-year battle to get their money back in what has become one of the biggest financial scandals of recent years.
Some 11,600 ordinary savers put £237m into LCF’s bonds and ISAs after being promised high returns from the FCA-regulated firm.Now the company’s directors are being investigated over fraud allegations. The directors have denied wrongdoing.
According to the company’s administrators, some of the investors’ money paid for thoroughbred racehorses and a helicopter while some went into companies which had links to LCF’s directors.Read moreIan Wilson, who invested thousands of pounds in LCF said news that the judicial review could go ahead was “very welcome”.”The 11,600 of us have been through a very torrid time,” he said.
“When you lose a substantial amount of money that is meant for the good of your family, it’s a huge blow. It has literally dominated all of our lives for the last two years.”“Many people have been hugely affected by this in terms of their mental health and their relationships with their families. For a long time, we thought we going to get absolutely screwed and would get nothing.”Mr Wilson, who recently retired after working in social care for 45 years, said he had hoped to use the savings he lost to LCF for deposits on homes for his two daughters.”Social care is not a profession known for making you very wealthy. All of us are just ordinary Joes.”It then felt like the FCA and the FSCS were sticking the boot in by telling us that what we’d bought wasn’t regulated which meant we could not get compensation.
“Now there’s light at the end of the tunnel. It’s given us hope at last.”Mr Wilson paid tribute to solicitors at Shearman & Sterling who have agreed to work pro bono bringing the judicial review case.The law firm argues that the claimants should be allowed compensation because LCF’s bonds should have been regulated. The judicial review only applies to investors who put money into LCF after the start of 2018.Read moreAmanda Cunningham, who put £16,000 into LCF bonds to pay for care for her autistic son, said  getting her money back would have a “huge” impact on her life.“The FSCS is trying to get out of paying compensation. We were told it was our own fault we lost our money because we shouldn’t have invested in high-risk bonds.”However, like many LCF investors, Ms Cunningham believed she was investing in an ISA and that her money was safe.  “I didn’t have a clue I was investing in a mini-bond. I didn’t even know what a mini-bond was.”The ordeal has been tough and getting her money back will make a “massive difference”, she said. “The money was for my son Jack, for his future. It is so, so important to me. He’s autistic, I don’t know what’s round the corner.  “At the moment I still feel quite bereft, I feel upset, foolish. You feel angry that you’ve been let down, you’re embarrassed by it, there are all these emotions.  “I can’t get closure on that until that money comes back. It’s a huge amount of money to me.”Investors have also been encouraged by the comments of Dame Elizabeth Gloster who is leading a review into LCF and the regulators’ handling of it. Earlier this year, Dame Elizabeth criticised the FCA for being slow to hand over documents.  Her review will interview staff at the FCA to establish what they knew about LCF  and when.
“The FCA have acted appallingly in all this,” said Mr Wilson. “They regulated LCF and then they tried to wriggle out of responsibility.”The FCA has maintained that while it was supposed to oversee the company and had approved its business model and directors, it had no responsibility for the investments it sold to savers.
Mr Wilson described the regulator’s stance as “outrageous”. He added:”The financial industry in this country is held up as the jewel in the crown but a lot of it is a fetid cesspit.”Thomas Donegan, partner at Shearman & Sterling, said: “We are very pleased that the court has given permission for this important case to be heard and that the LC&F investors’ quest for justice and recompense will continue.  “We feel confident in our arguments and look forward to presenting them to the court.”