Bank of England policymaker ‘cannot rule out’ further interest rate rises; Santander temporarily pulls some mortgage deals – business live

JPMorgan Chase has announced a tentative settlement in a legal claim brought by a woman who said that the US banking giant profited from sexual abuse that she and others suffered at the hands of disgraced financier Jeffrey Epstein.

“The parties believe this settlement is in the best interests of all parties, especially the survivors who were the victims of Epstein’s terrible abuse,” JPMorgan said in a statement.

The proposed deal could begin to shutdown weeks of embarrassing leaks about the extensive relationship that the bank had with Epstein, where the convicted sex offender was a client from 1998 to 2013 – seven years after he was first accused of soliciting a minor.

Here’s the full story.

More than 2,000 workers are set to lose their jobs at delivery giant Tuffnells as the business fell into administration.

Administrators are set to keep just 128 of the business’s staff after being appointed on Monday, PA Media report.

The Sheffield-headquartered company has 33 depots across the UK, and handles logistics to more than 160 destinations around the world.

The business has been under pressure since it was taken into independent ownership in 2020, hit by Covid-19 pressures, rising costs and increased competition, administrators at Interpath said.

Rick Harrison, managing director at Interpath Advisory, said:

“Unfortunately, the highly competitive nature of the UK parcel delivery market, coupled with significant inflation across the company’s fixed-cost base in recent times, has resulted in the company experiencing intense pressure on cashflow.

“Today’s news will be particularly devastating for Tuffnells’ 2,200 dedicated employees.

“Regrettably, with deliveries suspended and with no prospect of them resuming in the immediate term, we have had to make the majority of staff redundant.

“Our utmost priority will be to provide all those impacted with every support they need in making claims to the Redundancy Payments Office and minimising disruption to customers.

Media watchdog Ofcom has confirmed that it is a victim of a cyber-attack by hackers linked to a notorious Russian ransomware group, the BBC reports.

Confidential data about some companies regulated by Ofcom, and personal information from 412 employees was downloaded during the mass hack.

A number of firms, including British Airways, the BBC and Boots, have been affected by the software breach.

Ofcom said it had “swiftly” alerted all the companies that it regulates, and also referred the matter to the data and privacy watchdog, the Information Commissioners Office (ICO).

Mortgage rates are continuing to rise today, industry data snows.

The Daily Mail reports that average mortgage rates are closing in on 6% for a two-year fixed deal today – while the number of products available has fallen again.

They say:

The average rate on a new two-year was today at 5.86 per cent – up from 5.83 per cent last Friday, 5.72 per cent last Monday and 5.33 per cent a month ago.

Meanwhile a five-year deal was at an average of 5.51 per cent today – up from 5.48 per cent yesterday, 5.41 per cent last Monday and 5.03 per cent a month ago.

The data provided by financial experts at Moneyfacts also revealed the number of mortgage products available stood at 4,952 today, falling from 5,056 last Friday – although up from 4,686 last Monday. However it was down from 5,300 a month ago.

Santander is the latest major bank to announce it is temporarily pulling its mortgage deals for new borrowers off sale as the turmoil in the home loans market shows no signs of abating.

My colleague Rupert Jones reports:

Days after HSBC temporarily pulled down the shutters, Santander told mortgage brokers that it would stop accepting new applications for its “new business” residential and buy-to-let fixed and tracker rates at 7.30pm on Monday, with deals not becoming available again until Wednesday 14 June.

The move applies to applications made via mortgage brokers and online, though Santander said new deals for existing customers remained available, and that those people who applied before 7.30pm would not be affected.

But there is more positive news for borrowers, Rupert adds:

TSB will on Tuesday reduce the cost of some of its new deals by up to 0.4 percentage points.

Borrowers are being warned that mortgage rates are set to rise further, as turbulence continues to hit the market.

David Hollingworth, of broker London & Country, told Radio 4’s Today programme that the pace of change in rates has been “pretty relentless”. Lenders have been removing products from the market and replacing them with new offerings at typically higher rates.

Hollingworth explained that a couple of weeks ago, the best rates for five-year fixed mortgages were around 4%. Today, a couple of deals are available around 4.5% but most are at 4.75%.

Hollingworth predicts:

I think this week is going to bring more of the same.

Hollingworth explains that mortgage rates are rising because bank borrowing costs are increasing (as the financial markets expect UK interest rates to kee rising).

But, lenders are also finding that the market is shifting around them, as rivals push up their own rates.

Hollingworth said:

Therefore there’s a tidal wave of business coming their way…..they need to protect service, and borrowers of course are rushing to grab a rate now.

We’re back to that phase where you can’t hand around if you’re looking at a fixed rate.

Hollingworth is also hopeful that rates will ‘find a level’, meaning things start to calm down in the near future.”

More than 15,000 easyJet passengers have been hit by flight cancellations due to severe weather, PA Media reports.

The airline axed 54 flights scheduled to take off or depart from Gatwick Airport on Sunday because of storms, with a further 55 grounded on Monday.

Gatwick warned that more storms are expected on Monday.

An easyJet spokeswoman said:

“Thunderstorms in the Gatwick area which restricted the number of arrivals and departures on Sunday unfortunately resulted in disruption at London Gatwick Airport, including some diversions and cancellations which is having a knock-on impact this morning as a number of aircraft are out of position.

“We are doing all possible to minimise the impact on our customers, providing those on cancelled flights with options to rebook or receive a refund as well as hotel accommodation and meals where required.

“The safety and wellbeing of customers and crew is easyJet’s highest priority and, while this is outside of our control, we would like to apologise to customers for the inconvenience caused.”

Brexit, rising corporate taxes, growth concerns and political turmoil are causing US businesses to lose confidence in the UK as a place to invest, a new report shows.

The latest Transatlantic Confidence Index has found that US companies’ confidence in the UK business environment dropped for a third year in a row.

The survey, from BritishAmerican Business, the transatlantic trade association, and management consultancy Bain & Company, found:

…A continuing toll from Brexit on American business sentiment towards the UK is aggravated by US firms’ anxieties over political stability, economic growth prospects and corporate tax.

On the Index’s 1 to 10 scale, the average business confidence rating for the UK dropped by almost a full point, to 6.5 for 2023 – which is nearly double the half-point decline to 7.3 in 2022’s results.

Following the signing of the Windsor Framework agreement between the UK and EU in March, survey respondents acknowledged improvements in the UK-EU relationship. Confidence in this measure rose to 5.6 this year, up from 5.1 in 2021.

Jonathan Frick, partner at Bain & Company in London, said the transatlantic economic relationship and wider UK-US partnership are “crucial anchors for the security and prosperity of both nations”, adding:

“While it’s heartening to see the continuing vitality of the relationship between Britain and America, our findings also show important challenges, on both sides of the Atlantic, but especially in respect of US investors’ confidence in the UK.

These are a call to action for both governments as well as businesses in the two countries to work together proactively to further strengthen our transatlantic ties.”

In the financial markets, the pound has hit a one-month high against the US dollar today.

Sterling has been lifted by hopes that Britain’s economy will avoid a recession, and expectations that interest rates will keep rising for longer in the UK than the US.

The pound hit $1.2595 this morning, the highest since 11 May, taking some support from Jonathan Haskel’s warning that future rate rises can’t be ruled out.

The CBI has revised up its growth forecasts for the UK this year, from a 0.4% decline to show growth of 0.4% this year.

But, the CBI adds that 2023 will be challenging for households and businesses. For the first time since the recession of the early 1980s, it expects real household incomes – a measure of living standards – to fall for two successive years.

2023 will remain challenging for the CBI too, despite the embattled lobby group winning a crucial confidence vote last week.

Bloomberg reports that the CBI has been abandoned by major sponsors of its annual conference, saying:

Recruitment specialist Hays Plc sponsored the conference for about a decade but has since quit the CBI and won’t take part this year, a spokesperson said. The other leading sponsor, Accenture Plc, terminated its membership in April.

Rishi Sunak may have wanted to talk tech today, as he spoke warmly of the entreprenurial attitude in California today, and the UK’s pioneering role in the Industrial Revolution.

Asked about how to grow UK tech, Sunak says:

Fundamentally it requires entrepreneurs to just keep going, to be not content with building the £100 million business and then the £1 billion business but just to keep growing.

“That, I found in California, is very much the attitude, the sky is the limit. Everyone thinks they can create a 100 billion-dollar company and actually changing that culture is tough for government to do.”

He also cited his push to make everyone learn maths until the age of 18 (despite criticism of the plan), saying the UK is currently an outlier on this issue.

But he couldn’t avoid the current political turmoil.

He was asked at London Tech Week about former PM Boris Johnson’s resignation honours list, published hours before Johnson stropped out of parliament after receiving the privileges committee findings into the Partygate scandal.

Sunak says that he refused a request from his predecessor to intervene, saying:

“Boris Johnson asked me to do something that I wasn’t prepared to do, because I didn’t think it was right.

That request was either to overrule the House of Lords Appointments Commission (which did not support eight of Johnson’s nominations for peerages) or to make promises to people, Sunak says, adding:

“I wasn’t prepared to do that because I didn’t think it was right, and if people don’t like that, then tough.”

This wins some clapping, with Sunak adding:

When I got this job, I said I was going to do things differently because I wanted to change politics, and that’s what I’m doing.

Our Politics Live blog has more details:

Rishi Sunak then tells an anecdote about how he recently saw a letter from Charles Babbage, the inventor, from the 1830s thanking the then-chancellor for funding his Difference Engine.

That letter, in a British Library collection, showed that the government broke with convention by funding this cutting-edge idea, Sunak says.

That was a decisive moment. The British government broke with the conventions of the time, and for a decade backed this breakthrough technology.

He’s determined that future researchers in 200 years will find evidence that the current government, and the tech sector, met the current opportunities with the same “courage, vision and determination”.

Babbage’s largest project, the Difference Engine no. 1, was a machine intended to save the government money by preventing critical errors in tables calculated and copied by hand. Effectively it would have worked as a calculator.

However, the story doesn’t have a happy ending, as the Whipple Museum reminds us.

Funding was officially cut off in 1842 at which time he [Babbage] had spent over £17,000, ten times as much as originally intended.

Somewhat embarrassingly, the British government purchased a difference engine based on Babbage’s original design made by Swedes Georg and Edvard Schuetz, which they demonstrated at the World’s Fair in 1855.

Difference Engine no. 1 remained unfinished in Babbage’s lifetime, as he moved onto an even more challenging idea, the Analytical Engine, which actually included its own memory.