Get updates delivered to you daily. Free and customizable.
The Guardian
PwC fined £15m for not reporting suspected fraudulent activity at London Capital & Finance – business live
By Graeme Wearden,
3 hours ago
11.01am BST
LNER train drivers to strike on Saturdays and Sundays
Newsflash: Train drivers at LNER will take fresh strike action over the next three months that will disrupt weekend travel.
Drivers at LNER , which runs the passenger service on the East Coast main line between London and Edinburgh, will strike on every Saturday between 31 August and 9 November, and every Sunday from 1 September to 10 November.
The Aslef union say the action follows a breakdown in industrial relations, accusing LNER of bullying by management, and persistently breaking agreements.
Mick Whelan , general secretary of Aslef , said:
‘The continued failure of the company to resolve long-standing industrial relations issues has forced us into this position.
We would much rather not be here. But the company has brutally, and repeatedly, broken diagramming and roster agreements, failed to adhere to the agreed bargaining machinery, and totally acted in bad faith. When we make an agreement, we stick to it. This company doesn’t. And we are not prepared to put up with their boorish behaviour and bullying tactics.’
The issue is separate to the long-running dispute over pay, which could soon be resolved after Aslef and the UK government agree a pay offer in principle, which will be put to its members.
Economist Frances Coppola say’s it’s good to see auditors being held to account, following PwC’s fine.
10.38am BST
10.36am BST
A PwC spokesperson has said:
“We have reached a settlement with the FCA to resolve an unintentional reporting breach.”
10.26am BST
PwC fined £15m by FCA over LCF scandal
Newsflash: PwC has become the first audit firm to be fined by the UK’s Financial Conduct Authority (FCA).
The FCA has imposed a £15m fine on PwC, for failing to tell the regulator it suspected fraudulent activity at London Capital & Finance plc.
London Capital & Finance collapsed in 2019, wiping out the investments of thousands of savers.
It had sold “mini-bonds” had promised returns of up to 8% a year; more than 11,000 investors poured £236m into the bonds. But little of the money went into safe interest-bearing investments . Much went into highly speculative property developments, commissions by the bond marketeers, oil exploration off the Faroe Islands, and a helicopter bought for a company controlled by LC&F.
LC&F fell into administration in January 2019 after the FCA ordered the firm to withdraw misleading promotional material for the sale of mini-bonds.
The FCA says today that PwC encountered significant issues when it audited LCF in 2016.
The regulator explains:
A senior individual at LCF acted aggressively towards auditors, and the firm provided PwC with inaccurate and misleading information. PwC found the audit very complex, and it took considerably longer to complete than anticipated.
LCF’s actions, and PwC’s own work on the audit, led PwC to suspect that LCF might be involved in fraudulent activity. PwC was duty bound to report those suspicions to the FCA as soon as possible, but they failed to do so.
Therese Chambers, joint executive director of enforcement and market oversight at the FCA , says PwC should have acted ‘immediately’ when it suspected fraudulent activity was taking place:
“Auditors have a central role to play in keeping our markets clean. They have privileged access to information and they are required by law to report suspicions of fraud to the FCA.
“There were a number of red flags that led PwC to suspect fraud. They should have acted on them immediately. Their failure to do so deprived the FCA of potentially vital information.”
Back in May, PwC and fellow “Big four” accountancy firm EY were fined a combined £9.3m by the Financial Reporting Council (FRC) for failing to audit LCF properly.
The FCA adds today that the Serious Fraud Office has an open criminal investigation into the failure of LCF.
Updated at 10.30am BST
9.44am BST
The cost of living crisis remains one of the top issues facing Britain, the latest poll from the Office for National Statistics shows.
When asked about the important issues facing the UK today, the most commonly reported issues were the NHS (89%), the cost of living (88%), the economy (68%), housing (60%), crime (59%) and climate change and the environment (58%).
The ONS adds:
Just over half (54%) of adults reported their cost of living had stayed the same in the past month with less than half (45%) reporting that their cost of living had increased.
Around a quarter (25%) of adults believed they would be unable to pay an unexpected but necessary expense of £850.
9.30am BST
Revolut valued at $45bn after employee share sale
Fintech firm Revolut has announced it is now valued at $45bn (£35bn) after agreeing a secondary share sale for its staff.
The sale will “provides liquidity for employees”, Revolut says, allowing them to sell their stakes in Revolut to new investors.
Revolut, which finally secured a UK banking licence last month, says the sale price cements its position as the most valuable private technology company in Europe.
For comparison, NatWest bank’s market capitalisation is £29bn, while Barclays is worth £33.5bn.
8.53am BST
Shares in biotech group Bavarian Nordic have jumped 11% this morning after it said it will seek approval for its mpox vaccine to be used on adolescents.
Paul Chaplin , CEO of the Danish company,
“Children and adolescents are disproportionally affected by mpox in the ongoing outbreak in Africa, highlighting the importance and urgency to broaden the access to vaccines and therapies for this vulnerable population,”
Bavarian Nordic ’s stock has been rallying hard this week, up 40%, as concerns over mpox have intensified.
While it believes the current regulatory framework and the behaviour of manufacturers and suppliers are leading to poor market outcomes, the CMA wants to press on and devise workable solutions for governments to consider, as soon as possible. Beginning a full-scale market investigation would slow that down.
It’s expected to publish its interim report in October 2024, including provisional recommendations for action.
In February, the CMA warned that the cost of infant milk remained at “historically high” levels despite some price falls in recent months.
Doctors have warned that the health of babies from low income families is being put at risk by high prices.
In November, the CMA found there was only one UK retailer, Aldi, that sold own-label formula, and that competition was hampered because parents were reluctant to switch brands, either because they were recommended by friends and family or because their baby would only drink one type.
With retail sales volumes increasing across most categories last month, many retailers will be cautiously optimistic, says Tom Youldon , partner at McKinsey & Company .
Fragile consumer confidence may be lifted as inflation continues to hover close to the 2% mark and the first cut to interest rates since 2020 starts to feed through to household budgets.
While milestone events like the return of Taylor Swift’s Eras Tour and the final bank holiday could also give retailers an opportunity to deliver value, drive engagement and increase conversion with carefully planned promotion strategies.”
Sterling has risen to its highest level in almost three weeks.
The pound has gained 0.2% to $1.2875, the highest level since 29 July.
7.44am BST
Today’s retail sales report also shows the impact of inflation.
Compared with 2019, shoppers are spending 18.5% more, but taking home 2% less stuff.
7.36am BST
Here’s a chart showing how department stores led the way last month, with a 4% rise in sales volumes:
7.31am BST
Retail sales “bounced back strongly in July as expected”, says Neil Birrell , chief investment officer at Premier Miton Investor .
There is little doubt that the UK economy is moving along nicely with virtually all indicators pointing in the right direction, with sales volumes now virtually back to pre-COVID pandemic levels.
The stability of the economy must be making the UK look like an attractive place for international investors.”
7.30am BST
Introduction: UK retail sales return to growth
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
A busy week for UK economic data ends today, with the news that retail sales across Great Britain have returned to growth.
Retail sales volumes rose by 0.5% in July, the Office for National Statistics reports this morning. That follows a fall of 0.9% in June when households cut back amid poor weather, and election uncertainty.
Department stores and sports equipment stores reported a boost in sales “following summer discounts and sporting events” last month, the ONS says.
Sales volumes were 1.4% higher compared with July 2023, when bad weather hit the high streets.
But, volumes are still 0.8% lower than pre-pandemic levels.
The pattern of spending was mixed, though.
Sales volumes at “non-food stores” rose by 1.4% in July – driven by higher takings at department stores - after a 1.9% drop in June.
Retailers suggested that summer discounting and sporting events, such as the European football championship in which England and Scotland competed, boosted sales.
But, automotive fuel sales volumes fell by 1.9% in the month.
ONS director of economic statistics Liz McKeown says:
“Retail sales grew in July led by increases in department stores and sports equipment shops with both the Euros and discounting across many stores boosting sales.
“These increases were offset by a poor month for clothing and furniture shops, and falling fuel sales, despite prices at the pump falling.”
We learned yesterday that the UK economy grew by 0.6% in April-June, and was the strongest growth in the G7 group of advanced economies over the past six months.
This morning’s retail sales data suggests the UK economy continued to grow last month; Michael Brown , senior research strategist at brokerage Pepperstone, says:
This morning’s UK retail sales figures showed that consumers started the third quarter of the year on a relatively solid footing, with sales having risen by 0.5% MoM, and by 0.7% MoM when fuel is excluded from the data, implying that the solid economic momentum seen in the first half of 2024 has continued at the start of the third quarter.
The agenda
7am: UK retail sales report for July
10am BST: Eurozone trade balance 10am
1.30pm BST: US building permits/housing starts 1.30pm
3pm BST: University of Michigan’s US consumer confidence 3pm
Get updates delivered to you daily. Free and customizable.
It’s essential to note our commitment to transparency:
Our Terms of Use acknowledge that our services may not always be error-free, and our Community Standards emphasize our discretion in enforcing policies. As a platform hosting over 100,000 pieces of content published daily, we cannot pre-vet content, but we strive to foster a dynamic environment for free expression and robust discourse through safety guardrails of human and AI moderation.
Comments / 0