Chancellor warned against tax raid

Rishi Sunak continues to face calls not to raise taxes, this time in the wake of figures showing record UK borrowing. Paul Dales, of Capital Economics, urged Treasury officials to back away from tax hikes and spending cuts or risk derailing the economy. He said: “The best way to fix public finances is to make sure you have a stronger, bigger economy after this crisis. The worst thing to do is try to fix them too soon, make the economy smaller, and that makes it harder to fix in the long run.”

The Daily Telegraph, Business, Page: 1


Chancellor to reveal fresh package of support for business

Rishi Sunak is expected to unveil a new support package for businesses impacted by lockdown measures. The Chancellor is reportedly looking at options for hospitality businesses, which are forced to close under Tier 3 lockdowns, as well as measures to help companies hurt by Tier 2 restrictions. Hospitality businesses that are forced to close under Tier 3 restrictions are entitled to state grants, and their workers can have 67% of their wages paid by the Chancellor’s new job support scheme, but these measures are not available in Tier 2 areas. Mr Sunak will make a statement in the Commons today after briefing industry leaders.

Financial Times The Guardian, Page: 1

Edinburgh Woollen Mill seeks delay to administration

The CEO of Edinburgh Woollen Mill, Philip Day, will attempt to secure a delay in appointing administrators after the “circuit breaker” lockdown in Wales caused havoc for the company’s logistics. Mr Day applied for a notice of intention to appoint administrators earlier this month, which means he has until Thursday to bring in a firm – expected to be FRP Advisory – to oversee the process with more than 21,500 jobs at risk. He hopes the High Court will grant a ten-day extension to buy breathing space.

The Daily Telegraph, Business, Page: 1 The Times, Page: 36

Broker calls for Boohoo to appoint an independent chairman

City broker Peel Hunt has called for Boohoo to appoint an independent chairman amid ongoing consternation at the fast-fashion retailer’s governance. “For us, this [independent chairperson] would be a major part of the group’s rehabilitation in the eyes of investors and other stakeholders,” analysts at the broker said. The comments follow the resignation of PwC as Boohoo’s auditor and the refusal of any other Big Four firm to work for them, due to concerns over the company’s attitude towards workers in its supply chain.

The Daily Telegraph, Business, Page: 3


Insurers decide to pay out on business interruption claims

RSA is among six insurers that have decided not to challenge to a High Court ruling demanding they pay out on business interruption policies. The insurers will start to assess claims for certain policies but may still challenging the court’s decision on others. Nevertheless, Sonia Campbell, a lawyer at Mishcon de Reya who is representing policyholders, said it is “a huge win”’ for the businesses, but added: “Given the insurers’ approach to policyholders’ claims to date, businesses should not expect it to be plain sailing. Every policyholder has to prove its loss, and this is where we expect insurers to continue to frustrate the process.”

Daily Mail, Page: 73 City AM


TPR issues superfunds guidance

The Pensions Regulator has issued guidance for employers that want to transfer their defined-benefit obligations to consolidated superfunds. The move is set to kickstart the creation of multibillion-pound aggregator companies, according to the Times, while removing liabilities from hard-hit companies and lowering management costs.

The Times, Page: 38


IoD calls for insolvency rules break to continue

The Institute of Directors has called on the Government to extend a relaxation of insolvency rules granted to directors during the onset of the COVID-19 pandemic. The group’s director of policy Roger Barker said: “Without this protection, the pressure is on directors to simply shut up shop when faced with difficulty.”

The Times, Page: 41


FCA says 12m in UK set to be left struggling with debt

The Financial Conduct Authority is urging borrowers affected by coronavirus lockdowns to seek support from their banks, as its figures show 12m Britons are likely to struggle with bills or loan repayments.

Financial Times, Page: 2


Spending review announced after record borrowing spree

Chancellor Rishi Sunak has launched a spending review intended to set out financial plans for 2021-22. The review, which had been expected to cover a three-year period, will be shortened to one year as a result of uncertainty around the coronavirus pandemic. Tax hikes that could help to address the deficit will not be included, given the risk of damage to any economic recovery. The move comes after official figures showed a record £208.5bn was borrowed in the first six months of the financial year. At the end of September, the national debt was £2.06trn, equivalent to 103.5% of GDP, a 60-year high, according to the ONS.

The Daily Telegraph, Business, Page: 5 The Times, Page: 36 Financial Times, Page: 2 Daily Mail, Page: 8 The Guardian, Page: 35

Inflation rises in September ahead of possible quantitative easing

UK inflation was up last month, with consumer prices rising 0.5% on an annual basis, up from 0.2% in August. Paul Dales, chief UK economist at Capital Economics, said of the Bank of England’s Monetary Policy Committee: “It’s hard to think of reasons why the [MPC] won’t launch another £100bn or so of QE at the November meeting. And despite public borrowing still jumping, the Government may yet spend more.” Howard Archer, chief economic adviser to the EY Item Club, added: “Many people have already lost their jobs, despite the supportive government measures, and others will be worried that they may lose their jobs with the furlough scheme ending in October. Additionally, many incomes have been affected. This is likely to keep consumers price conscious for some time.”

The Daily Telegraph Financial Times City AM

Contact Paul Southward