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LONDON STILL AHEAD OF UK GROWTH RATE CAPITAL HAS AVOIDED WORST OF ECONOMIC PAIN – SO FAR CHARLIE CONCHIE LONDON’s economy has continued to outpace every other region in the country even as rising interest rates and recessionary fears drag on growth across the UK, a closely watched survey has revealed. Growth in London slowed in July as the Bank of England’s rate cycle eats away at spending power but the capital remained well ahead of the UK in the speed of its economic growth, according to Natwest’s London PMI Business Activity Index released today. London’s index reading came in at 52.3 for the month, putting it comfortably above the contraction that has gripped most of the UK. The West Midlands was the only other region to
notch an expansion last month. London’s latest print did mark a third monthly slowdown, however, with growth falling from 56 the previous month. Analysts at Natwest warned that rapid rate hikes by the Bank of England were also likely to dent growth further in the months ahead. “July data seems to have confirmed the trend that appeared during the second quarter, namely that the London economy has lost steam as rising interest rates take their toll on spending and activity,” said Catherine van Weenen, Natwest regional director for London and the South East. The UK on the whole notched its first decline in new orders across the UK since January, and slowdowns in both London and the West Midlands could
signal they will “join the rest of the country in contraction territory soon”, she added. Demand is expected to dampen again in August after Threadneedle Street moved to ramp up interest rates for a 14th straight time earlier this month to tame stubborn inflation. UK borrowing costs now stand at 5.25 per cent, their highest since March 2008, extending the Bank’s toughest tightening cycle since the 1980s. City analysts are predicting that rates in the UK will peak at between 5.75 and six per cent. Resilient growth in London in July also came despite businesses in the capital feeling the pinch of rising costs harder than any other region. Natwest’s prices index ticked up to 69.5 during July, signalling a faster pace of cost inflation faced by firms in London. Wage pressures appeared to be driving up costs fastest in the capital, Natwest said.
IT’S MURDER OF THE DANCEFLOOR JAMES SILVER THE UK’s largest nightclub operator has warned that Brits are cutting back on nights out as a tougher economic climate eats into budgets. Peter Marks, chairman of Rekom UK which runs a host of nightclubs across the UK and northern Europe, told PA Media that whilst average spend was holding up, Brits were going ‘out out’ less regularly. “We have people enjoying similar
nights out but going less often because they have had to take a second look at their budgets.” He added: “You have to feel sorry in particular for students. “Having had their studies disrupted by Covid-19, a return to normality should be what they were looking forward to. “To then face a cost of living crisis and huge inflationary pressures when it’s ‘their time’ as young adults, is a real kick in the teeth.”
Fintechs go to war with big lenders over feet dragging on open banking CHARLIE CONCHIE FINTECH policy chiefs and entrepreneurs have called for the government to expand open banking provisions and unleash a financial data revolution, warning big banks will need to be compelled to open their books.
With stakeholders consulting on the next stages of open banking, many in the sector have suggested regulators need to be bold in expanding data sharing rules into new financial products. Many products are currently outside the frameworks for data sharing, which has mainly focused
on current accounts. Open banking allows consumers to ‘plug in’ their data to services which can use technology to find them a better deal. “Unless we systematically expand open banking, our citizens and small businesses will miss out on opportunities to access and control
their financial data to improve financial health, productivity and sustainable growth,” Adam Jackson, director of policy at Innovate Finance – the fintech trade body – told City A.M. “These banks are hiding information from their own customers – purely for profit. It’s
data protectionism on a colossal scale,” fintech firm Cardeo’s boss Gavin Shuker told City A.M. Many lenders did not reply to a request for comment; however, Barclays said they “actively participate” in the open banking ecosystem and followed all regulatory requirements.
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