Christmas Dinner is likely to cost 22% more this year, thanks to the soaring costs of that essential ingredient – pigs-in-blankets – which are up 40% year-on-year. Frozen turkeys, spuds, stuffing balls, gravy granules and mince pies are all also rising faster than underlying inflation. The only thing that seems to remain at the same level is everyone’s least favourite item, the humble brussels sprout. Still, despite these price rises, the cost of the average UK Christmas dinner remains one of the cheapest in the world. Research shows Brits spend an average £28 for their Christmas meal, half of what the average German family pays, who traditionally consume a roast goose with all the trimmings. Romanian families have the cheapest meal with their feasts of Sarmale (pork, minced beef, sour cream, and hot peppers) coming in at just £22.30 for a family of four.
Surely an expensive Netflix bio-pic of bankrupt crypto-king Sam Bankman-Fried must already be in the make (head to editor Ollie Smith’s Twitter poll to let us know who you the best casting would be). SBF, as he is known, has being doing the media rounds, telling ABC’s Good Morning America that he wasn’t the next Bernie Madoff, although he admitted not spending “any time or effort” thinking about risk management at FTX, his now-collapsed crypto exchange that owes creditors billions. Meanwhile, SBF told the New York Times it had been a “bad month” for him, but he had not deliberately committed fraud. SBF (how about casting Paul Dano?) admits he can be “a little cocky” but isn’t worried about possible jail-time and is confident things will “end up ok”. However, in what might be seen as the prosecution putting its case forward in its own media blitz, Galaxy Digital CEO Mike Novogratz (surely a Matt Damon cameo) told CNBC that SBF was ‘delusional’ and should be ‘locked up’.
… while UK Plans Crypto-Hub
The US has Silicon Valley, which the UK tried to emulate, via Silicon Glen (around Glasgow) and Silicon Fen (Cambridge). Now the government is turning to newer technologies with plans for a Crypto City in London. Despite the fallout from the collapse of FTX, the economic secretary to the Treasury, Andrew Griffith, said he still wanted the capital to become a hub for these emerging currencies and associated technology. He also raised the possibility of government- or Bank of England-backed digital currencies, which could be more stable than privately-created crypto assets, often held in more lightly regulated jurisdictions. Whether you think the UK will be a global crypto-capital or end up a bitcoin bombsite largely depends on your view on this emerging fintech asset.
Twitter Faces EU Ban
The EU has warned Elon Musk that Twitter could banned from the EU if it doesn’t sort out its content moderation and both protect freedom of speech while tackling disinformation and fake news. All are needed to meet new EU laws coming into force in 2024, with the EU carrying out preliminary ‘stress tests’ early in the new year. Twitter’s actions to date do not look wholly promising. Musk has disbanded the company’s Brussels office, and recently allowed both Donald Trump and rapper Kanye West back onto the social media platform, despite previous bans for incitement to violence and hate speech. Trump is, for now at least, sticking to his own social media site, while West, now known as Ye, was rapidly suspended again, this time for posting a swastika.
Steel Workers get Their Pension Payday…
More than 1,000 members of British Steel’s pension fund will receive payouts after being wrongly advised to transfer out of the ‘gold-plated’ final salary scheme, after the sponsoring employer ran into financial difficulties. The regulator has said that of the £49 million being paid out, the average worker will receive around £45,000, which should be paid by the end of next year. Pension mis-selling scandals can have a deja-vu feel to them. Here, advisers were paid handsome commissions, but only if workers transferred out of this scheme which paid a guaranteed pension. Not surprisingly, the regulator found that “unsuitable advice” was given in around half the cases it reviewed. Rules around commission have now been tightened, although this has happened before and hasn’t seemed to stop scandals like this happening.
… As Lloyds Pension Scheme Loses ‘Billions’ in Gilt Sell-Off
Along with a parliamentary committee, we got a behind-the-scenes glimpse of what really happened at one of the UK’s largest pension funds in the immediate aftermath of the mini-Budget. Unusually, one pensions expert Henry Tapper also disclosed information about his partner, who is head of group pensions at Lloyds. His written statement said Lloyds Banking Group’s defined benefit pension was forced to liquidate a large proportion of its equity holdings to pay billion-pound collateral calls as gilt prices spiralled downwards. Tapper said “much of the money posted as collateral won’t be seen again”. Lloyds, like most other DB schemes, runs liability-driven investments, intended to match scheme assets with pension liabilities. These have previously been seen as being low-risk, but during the unprecedented slump in gilt prices following the mini-Budget, they ran into severe difficulties.
Discount ‘Countdowns’ Probed by CMA
Are the owners of Emma Sleep, the online mattress seller, resting easily at the moment, with the Competition and Markets Authority investigating its sales tactics? The CMA is looking at ‘countdown clocks’ on discount prices — used by companies like Emma Sleep — as part of a wider market review, which will examine whether these put undue pressure on shoppers. The CMA said it was important to not pre-judge outcomes and this review did not mean the German-company had done anything wrong. However, in a phrase which doesn’t seem designed to encourage sweet dreams, the CMA said it was “reminding businesses” they should not use “urgency claims to mislead consumers” and those that do could risk regulatory action.
Bank Branches Going, Going, Almost Gone
There’s another cull of bank branches on the high street. HSBC is closing 114 branches – almost a quarter of its current branches – blaming falling footfall due to the pandemic. The bank says that nine out of 10 banking transactions are now done digitally. According to Which?, more than 5,000 UK bank branches have closed since 2015, leaving some communities without access to any banking services. The sector had promised to provide shared bank hubs, particularly to help small businesses and older or more vulnerable customers, but to date, just two have appeared on UK high streets. Campaign groups are urging banks to invest the money saved from closing branches into better telephone services, pointing out that customers sometimes wait up to 30 minutes to talk to their bank’s call centre.
What a Bumper Pay Day Looks Like
Not everyone is feeling the pinch. Hedge fund founder, billionaire and Rishi Sunak’s former boss, Sir Chris Hohn, has paid himself a record dividend of £575 million — the highest paid to an individual. However, the money, according to accounts filed at Companies House, is being paid to another business within Hohn’s TCI Fund Management group, rather than going directly into Hohn’s pocket. Still, as the 67th richest person in the UK (according to last year’s Sunday Times Rich List) Hohn probably isn’t too worried about his former employee putting up taxes on dividends, despite this record-breaking payout.
City Brokers Do Feel the Pinch Though
Hedge funds like TCI Fund Management might be making record breaking profits but other city firms are in dire straits. City stockbroker Peel Hunt has seen its half-year pre-tax profits plunge from £29.5 million 12 months ago to just £100,000 this year. The broker’s main revenue-earner had been helping smaller companies list on the London Stock Exchange, or raise money, but there has been a dramatic drop in this activity. Given the current uncertain economic climate, this is causing a calamitous drop in profitability at the firm. Perhaps fees will be revived with an influx of crypto-companies to the City?
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