The number of people defaulting on their credit card debts soared in the first three months of the year, according to figures from the Bank of England.
Credit card lenders reported that defaults jumped to their highest level since the first half of 2017, following a deteriorating trend that dates back to last summer.
The default rate, which is calculated by the central bank based on a balance of responses from lenders, increased to 22.9% in the first quarter from 12.7% in the last quarter of 2018 and -11.2% in the third quarter of the same year. A positive figure indicates that the number of defaults has increased.
The last time the credit card default rate rose above 20% was in the second quarter of 2017, when it hit 25.4%.
Anti-poverty campaigners have argued that the recent rise in defaults showed that increasing numbers of low-income households were getting into serious financial difficulties; analysis by the Guardian of...
Crossrail’s opening date could be pushed back into 2021, as bosses continue to assess the remaining work to be done on the flagship London railway project.
A new target is due to be announced next week by Mark Wild, the Transport for London chief executive parachuted in to lead the programme after the extent of delays was belatedly revealed last summer.
A best and worst range will be set, with the earliest date being spring 2020. A Crossrail spokesman said it was still working to finalise its plan, but according to a BBC report, the window for the opening of the west-east mass transit line will now extend to spring 2021.
Crossrail announced last August that the originally planned December 2018 opening would be delayed by a year, but Wild has since confirmed there was no chance of the line opening before 2020.
A public accounts select committee report earlier this month said it was “not convinced that new services will start to run...
Britain’s consumers ignored the turmoil at Westminster last month and splashed out in high street stores and online.
Despite fears that spending would plummet as a result of mounting Brexit uncertainty, figures from the Office for National Statistics showed retail sales were up 1.1% in March.
The ability of consumers to shrug off political events surprised the City, which had been predicting a 0.3% monthly drop in spending.
The year-on-year rise in retail sales between March 2018 and March 2019 of 6.7% was the highest since October 2016, although the annual comparison was distorted by last year’s “beast from the east” cold snap.
Last month’s unexpectedly strong activity meant that sales in the first quarter – a better guide to the underlying trend – increased by 1.6% on the final three months of 2018.
The ONS said all categories of retail spending apart from department stores and household goods rose in the three months to...
New economic data from Japan is already out, showing a worrying drop in exports.
Japan’s factory sector is shrinking this month, extending a contraction that began in February, according to Nikkei-Markit’s new survey of purchasing managers.
The flash Japanese manufacturing PMI came in at 49.5 in April, up from 49.2, but crucially below the 50-point mark separating expansion from contraction. Exports are falling again this month, at a faster rate than in March.
Joe Hayes, economist at IHS Markit, blames the US-China trade war:
Pinterest Inc’s initial public offering set the online scrapbook company’s valuation at $12.7bn on Wednesday, above its expectations and a sign of strength for the tech IPO market after Lyft Inc’s struggles.
Pinterest, where users save ideas for clothes, décor and recipes, is due to start trading on the New York Stock Exchange on Thursday. Its performance will be a key test of the tech IPO market after the Nasdaq debut of ride-hailing start-up Lyft at the end of last month.
Lyft shares have dropped around 17% from its IPO price, raising concerns about bigger rival Uber Technologies Inc when it prices its IPO next month.
Rail passengers who have ridden out a year of disruption through timetable meltdowns, strikes and seasonal weather have been warned of another factor causing delay: balloons on the line.
Network Rail said there was a growing problem from helium-filled balloons, which it blamed for causing hundreds of train delays annually at a cost to the taxpayer of about £1m.
Across England, Scotland and Wales, 619 “balloon-related incidents” – almost two a day – were recorded by the company last year. Most of the delays were caused by helium balloons getting tangled around high-voltage overhead wires, which can be potentially fatal for the balloon owner if they fail to let go.
Each time such an incident occurred, trains had to be stopped while the 25,000 volt electric current was switched off and the lines were made safe.
On at least one occasion, trains were unable to depart from London on the major north-south West Coast main line...
“The EU has taken advantage of the US on trade for many years. It will soon stop,” Trump tweeted last week.
The EU counter-claims that tax breaks to Boeing, along with unfair procurement practices, have caused $12bn worth of damage to Airbus. The two sides have been battling for almost 15 years at the WTO over the subsidies given to Boeing and Airbus.
The EU’s trade commissioner, Cecilia Malmström, said she wanted to avoid a tit-for-tat trade war with Washington, and called for Trump to come to the negotiating table. “European companies must be able to compete on fair and equal terms,” she said. “The recent WTO ruling on US subsidies for Boeing is important in this respect. We must continue to defend a level playing field for our industry.
“But let me be clear: we do not want a tit-for-tat. While we need to be ready with countermeasures in case there is no other way out, I still believe that dialogue is what should prevail between important...
House prices across Britain have increased at their slowest rate for more than six years, with London experiencing its biggest slump in a decade as Brexit concerns drag on growth.
The Office for National Statistics said average house prices in the UK rose by 0.6% in the year to February, the lowest rate of growth since September 2012, and down from a rate of 1.7% in January.
The price of an average London home fell by 3.8% on the year, the steepest drop since the depths of the last recession in mid-2009, and faster than the 2.2% decline recorded in the year to January.
The consumer price index (CPI) measure of inflation unexpectedly remained at 1.9% in March, unchanged from a month earlier – offering some respite for UK households.
Interest rates on loans for students in England, Wales and Northern Ireland will, however, rise by up to 5.4% after the March retail price index (RPI) measure of inflation came in at 2.4%.
Pendragon, one of Britain’s biggest car dealers, slumped to a loss in the first quarter after it was forced to lower prices to shift cars.
The Nottingham-based company, which trades under the Evans Halshaw, Stratstone and Car Store brands, also said the cost of expanding its second-hand car business had been higher than expected.
Pendragon made a loss before tax of £2.8m in the first three months of the year, about £10m below where it expected to be. The group blamed falling margins across all parts of the business in new and used car sales as well as its aftersales business, although new cars were worst hit.
Shares initially fell 13% after the trading update was published and were down 8% at 23p by mid-morning.
Pendragon is in the middle of a five-year plan to double second-hand car revenues by 2021. As part of that process it has been opening more stores that only sell used vehicles, under the Car Store brand. It...
The main City regulator fears being left behind by a new wave of technological innovation that could increase the risk of financial firms making bad decisions and going bust, according to its latest business plan.
The Financial Conduct Authority warned developments, which include artificial intelligence and the introduction of blockchain technology for financial transactions, could race ahead without adequate regulations in place, potentially undermining the strength of London as a financial centre.
The FCA’s chief executive, Andrew Bailey, said Brexit continued to soak up resources, and the regulator needed more resources to dedicated to upgrading current regulations.
“Dealing with Brexit will be the most immediate challenge we face. But this plan also commits us to a stretching programme of work across the financial sector.
“In order to ensure we are a regulator that continues to serve the public interest, we need to adapt to the...
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
China has batted away concerns that its economy is faltering, by posting better-than-expected growth figures.
Despite the pressure of Donald Trump’s trade war, the Chinese economy grew at an annual pace of 6.4% in the first three months of this year, official figures show.
That matches the previous quarter’s growth rate, and suggests Beijing’s stimulus programme succeed in warding off a slowdown and a potential hard landing.
Economists had expected growth to slow to 6.3%, down from 6.8% a year ago, as the trade dispute with America -- and slowing global growth -- hit the world’s second largest economy.
The global financial system faces an existential threat from climate change and must take urgent steps to reform, the governors of the Bank of England and France’s central bank have warned, writing in the Guardian.
In an article published in the Guardian on Wednesday aimed at the international financial community, Mark Carney, the Bank’s governor, and Villeroy de Galhau, the governor of the Banque de France, said financial regulators, banks and insurers around the world had to “raise the bar” to avoid catastrophe.
They said: “As financial policymakers and prudential supervisors we cannot ignore the obvious physical risks before our eyes. Climate change is a global problem, which requires global solutions, in which the whole financial sector has a central role to play.”
The warning comes as concern over the impact of climate change and the lack of urgent action is increasing, reflected in the Extinction Rebellion protests and...
Home is not an address. It is a feeling. Millions of people have the keys to a property, yet enjoy none of the security we associate with the word “home” because their housing is not decent, safe and affordable, or because they have no idea how long they may remain there. Private renters are particularly vulnerable.
The proportion of private tenants in England doubled in the first decade or so of this century, to around a fifth of the population. The proportion of their incomes consumed by rent also increased sharply. So did the amount that taxpayers hand over to landlords.
Many young people no longer aspire to buying property. But “generation rent” is a broad category. A quarter of families with children are renting; one in five has moved at least three times in the past five years, according to Shelter, often disrupting schooling. Hundreds of thousands of older people are vulnerable.
While they have little power as tenants, they still have an impact...
Huawei bosses have accused the US government of being “ignorant of technology” and “belittling” national security concerns with repeated unsubstantiated claims that the company is an arm of the Chinese state and its mobile network can be used to spy on western governments.
John Suffolk, Huawei’s chief security officer and the UK government’s former chief IT adviser, said US politicians had not produced any evidence to back up claims that Huawei’s forthcoming 5G mobile technology could be hacked by Chinese spies to eavesdrop on sensitive phone calls – or even kill targets by crashing driverless cars.
Suffolk, who was one of the highest paid British civil servants before he left for Huawei in 2011, said America’s allegations were motivated by politics and “certainly not security” concerns.
“[America] can’t keep saying [Huawei] has got some dodgy technology. [Edward] Snowden revealed all kind of things going on with American technology,” he...
Two House committees have stepped up their investigation of Donald Trump’s business operations by issuing subpoenas for a range of documents from the institution that has long been his main financial prop, Deutsche Bank.
The move comes from the intelligence committee and financial services committee of the House, both of which have been controlled by the Democratic party since January. Leaders of the two panels stressed the urgency of the inquiries.
Maxine Waters, who heads the financial services committee, said the investigation was exploring “the use of the US financial system for illicit purposes”, including the potential involvement “of the president and his associates”.
On the intelligence committee side, the panel’s chairman, Adam Schiff, said subpoenas had been sent to “multiple financial institutions” including Deutsche Bank, which he emphasized was cooperating.
In past comments Schiff has indicated that the purpose of the...
JD Sports bucked the trend on Britain’s struggling high streets with record annual profits as the retailer capitalised on rising consumer demand for sports fashion and pressed ahead with expansion in the US.
Pretax profits jumped 15% to £340m and like-for-like sales were up 6% in the year to 2 February, making it a standout performer at a time when some of the biggest names in retail are being forced to close stores amid rising costs and a shift to online spending.
Shares in JD Sports rose 5% to a record high of 559p. With a market value of more than £5bn, JD Sports easily dwarfs rival Sports Direct which is valued at about £1.6bn. It is also bigger than Marks & Spencer at £4.5bn, and puts it in contention for entry into the FTSE 100 at the next quarterly reshuffle.
Peter Cowgill, executive chairman, said JD “has the necessary agility to continue to exceed consumer expectations and prosper in an increasing...
Ouch! Shares in German airline Lufthansa are sliding, after it posted a shock loss for the last quarter.
Germany’s biggest airline made an adjusted loss of €336m in January-March, down from a profit of £52m a year ago. It blamed rising fuel costs and downward pressure on fares, which has sent a shiver through the travel sector.
Lufthansa shares have slumped 5% at the open in Paris. In London, easyJet have lost 1.4%.
Falling fares is excellent news for passengers, especially those who’ve put off booking holidays because of Brexit. But it also suggests an overcapacity problem in the airline industry, which has already seen several airlines collapse in recent months.
Amazon’s customer review system is being undermined by a flood of “fake” five-star reviews for products from unfamiliar brands, a new investigation claims.
The consumer group Which? analysed the listings of hundreds of popular tech products in 14 online categories including headphones, dashcams, fitness trackers and smartwatches, checking for telltale signs of suspicious reviews.
Its researchers found that top-rated items were dominated by brands with names such as Itshiny, Vogek and Aitalk, which in many cases had thousands of unverified reviews – meaning there was no evidence that the reviewer had even bought or used the item.
Many items also boasted a high number of five-star ratings posted in a short space of time – another indicator suggesting inauthentic reviews.
With headphones, all the products on the first page of results sorted by average customer review were from little-known brands and 87% of more than 12,000 reviews...
Sports Direct, owned by billionaire leisurewear tycoon Mike Ashley, is to close a warehouse in Wigan, Greater Manchester with the loss of 300 jobs.
In a move described as a “body blow” to the region by the GMB trade union, Sports Direct stunned workers by announcing it would shut the factory on 13 June. Employees, who mostly work packing goods for nationwide distribution, were told of the decision on Monday.
The GMB criticised the decision by the sportswear company, which was exposed in 2016 by the Guardian for making staff work in “Victorian workhouse” conditions.
The GMB regional secretary Paul McCarthy said: “This closure is another body blow for the north west – caused by a company with a track record of putting profits before people. The hardworking, dedicated staff at the warehouse have already been put through the grinder once when the site was run by [defunct sportswear brand] JJB - and now this.
“GMB will not rest until...
“What do I know about branding[?]” Donald Trump mused on Twitter, early on Monday morning. “Maybe nothing […] but if I were Boeing, I would FIX the Boeing 737 MAX, add some additional great features, & REBRAND the plane with a new name.”
Fashion chain Monsoon Accessorize has become the latest high street retailer to deploy the controversial tactic of closing stores and seeking rent reductions in a bid to mend its finances.
Accountancy giant Deloitte has been hired to help the retailer secure a company voluntary arrangement (CVA), an insolvency procedure used by numerous struggling retailers and restaurant chains including Mothercare, New Look, Debenhams, Giraffe and Byron.
The increasingly common strategy involves closing less profitable or loss-making stores, while seeking agreement from landlords to reduce rents on other properties, rather than risk the company going bust altogether.
Sources told Sky News that “dozens” of Monsoon Accessorize’s 270-strong store network could disappear if the plan goes ahead, although the number of closures is yet to be agreed.
The largest shops, in both the Accessorize and Monsoon chains, are thought to be most at risk.
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