Speaking of banks….More than one in eight UK bank branches that were open at the start of 2023 will have closed by December, the Financial Times reports this morning.
This means that almost three-fifths of the network will have vanished since 2015, making banking harder for customers in more rural areas or who haven’t embraced electronic banking.
“A closed bank branch doesn’t just mean one less place to withdraw or deposit cash locally,” said SamRichardson, deputy editor of consumer rights magazine Which? Money.
“[It] also makes getting access to face-to-face banking services harder — something that is particularly important for more vulnerable customers.”
Financial Times analysis, based on data from ATM provider LINK, shows that a total of 636 bank branches are due to close by the end of this year, with 424 having closed so far.
Some 42 more have already been announced for 2024.
An executive at the Financial Conduct Authority (FCA) has warned banks that the regulator will take action if they wrongly deny politicians or their families access to services.
Following the row over Nigel Farage’s bank account at Coutts, FCA executive director Sarah Pritchard said they are reviewing whether financial institutions are being “proportionate” in their risk assessments of politically exposed persons (PEPs).
Writing in the Daily Telegraph today, Pritchard says the FCA will take action if it finds that banks and others are “more tick-box than risk-based” in their approach to PEPs.
The UK is one of more than 200 countries and jurisdictions that have signed up to additional financial checks on senior figures in public life, known as Politically Exposed Persons. Here, Parliament has written those standards into law.
In response to these requirements, it is necessary and proportionate for banks to ask those with power for more information about sources of wealth and financial connections, for example. But an appropriate level of inquiry should not feel like the financial equivalent of someone rifling through your bin. We have heard that often it has, particularly for the families of political figures.
City minister Andrew Griffith has welcomed the move:
Good to see @TheFCA making clear today that blanket approaches are wrong and any checks by banks must be proportionate.
Banks who wrongly deny accounts to politicians face fines, watchdog warns https://t.co/qp8kG3IyGQ
Britain’s retailers have received a boost from consumers making themselves beach-ready by increasing their spending on skincare and makeup before their summer holidays, despite the cost of living crisis.
The British Retail Consortium (BRC) said sales of health and beauty products helped drive up spending on the high street as shoppers made the most of brief spells of sunshine in August, although squeezed consumers were holding back elsewhere.
Separate figures from Barclays showed that pharmacy and health and beauty stores benefited from pre-holiday purchases, with a 5.2% rise in sales likely due to holidaymakers buying suncream and other toiletries for trips away.
The BRC said total sales rose by 4.1% compared with a year earlier, above the annual average growth rate, to recover from a disappointing month in July. However, much of the rise was the result of high inflation pushing up the value of goods being sold, masking weaker sales volumes.
UK consumers are suffering from a bout of “Skimpflation”, as manufacturers downgrade the ingredients in certain food and drink products.
Over half the Brits surveyed by Barclaycard reported that some of the food and drink products they buy have been downgraded in terms of quality or the quantity of premium ingredients, yet still cost the same or more than they used to.
Within this group, the most frequently cited skimpflation examples include crisps (44 per cent), sweets and chocolate (43 per cent), and cakes and biscuits (36 per cent).
A fifth also feel takeaways (22 per cent) and restaurant meals (20 per cent) are decreasing in quality without a corresponding fall in price.
Barclaycard also report that this ongoing trend also extends to non-food products, such as clothing, toilet paper and toiletries and cosmetics.
Food and non-food producers have been hit by rising input costs over the last 18 months, prompting them to turn to cheaper raw materials.
They’ve also been cutting the size of some items – the practice known as “Shrinkflation”. Chocolate, crisps and packs of biscuits remain the top products identified as being impacted by this ongoing trend.
Barclays also reports that consumer card spending grew 2.8% year-on-year in August. That’s below the rate of inflation (6.8% in July), indicating that shoppers bought less.
Esme Harwood, director at Barclays, explains:
“The rainy weather impacted high street and hospitality venues in August, but Brits were still keen to spend on memorable summer experiences. The huge Box Office success of ‘Barbie’ and ‘Oppenheimer’ meant entertainment enjoyed another strong month, while holidays abroad boosted international travel and pharmacy, health & beauty stores.
“Shrinkflation – and now “skimpflation” – are increasing concerns for value-seeking shoppers. However, Brits’ confidence in their household finances is unwavering, suggesting they remain resilient in the face of these inflationary pressures.”
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
UK car sales have now climbed for more than a year, despite the cost of living squeeze, as motorists shift to electric vehicles.
Data due this morning is expected to show that new car registrations in Britain rose for the 13th consecutive month in August, rising more than 20% from a year earlier.
That’s according to preliminary industry data from the Society of Motor Manufacturers and Traders (SMMT), with the final data due at 9am.
A growing number of those cars will be EVs from China – its share of the European electric car market has more than doubled in less than two years.
My colleague JasperJolly explains:
The UK is the largest market in Europe for Chinese electric car brands, accounting for almost a third of sales in 2023 so far, according to data from Schmidt Automotive Research on the 18 largest European car markets. About 5% of all new car sales in the UK were from Chinese brands in the first seven months of 2023, a market share second only to Sweden.
Sales are accelerating: Chinese carmakers sold almost the same number of electric cars in Europe in the first seven months of 2023 as they did in the entirety of 2022.
Chinese brands have long struggled to break into Europe because of a reputation for lower-quality cars. However, some analysts believe the advent of new battery electric technology has wiped the slate clean for Chinese brands, and sales are booming.
The latest surveys of purchasing managers at UK service sector companies, and across the eurozone.
We’ll be tracking the situation at stricken UK retailer Wilko, which fell into administration last month.
It emerged last night that a rescue deal to save the majority of Wilko’s stores has been put at risk as some key suppliers want outstanding debts repaid upfront to guarantee continuing to provide products to the chain.