Shocks & Stares » Budget H&K\'s Financial & Professional Services Team Blog Tue, 19 Mar 2013 08:00:56 +0000 en hourly 1 FPS’ Friday Friday Fri, 30 Mar 2012 17:45:30 +0000 Joey Ng

Image credit: Creative Commons/ su-lin

1. Just when we thought Granny tax ruled the “Best _______ tax” name, this week the press (and Twitter) had a field day with the pasty tax saga. The surprise budget announcement sparked a threat of a bakers’ march led by the head of bakery at Greggs. According to the Guardian, an online petition has already been set up on Downing Street’s scheme by bakers’ trade associations. Sign up here.

2. Not content with scoring the own goals that were pasty-gate, grannytax and the donor-row, the Government proceeded to exacerbate their worst week ever and add fuel to the flames of a pending petrol crisis that never materialised, despite Francis Maude’s best efforts.

3. The question on everyone’s lips is “Are we back in recession?” The answer is it depends on who you’re speaking to. Latest OECD figures reveal that the economy has shrunk for the second quarter, but according to predictions from Office for Budget Responsibility, the UK will avoid a recession with the economy growing by just 0.8 per cent over the course of 2012.

4. A giant step for the Eurozone but a small step for the global economy as the European Union confirmed the extension of the European bailout fund. The total funds available has now reached €700bn.

5. And on that note, I leave you with this video from the OECD with its latest Interim Economic Assessment on the global economy

Post contributors: Nick Woods, Edward Jones

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The Best of the Budget Fri, 23 Mar 2012 18:04:33 +0000 Edward Jones Rather than the usual Friday Fiver, this week we have decided to look at the Budget. Shock horror. Rather than add to the millions of words of analysis already published on that topic, we thought we’d make your lives easier and point you to the most memorable elements of this week’s main event.

Best Analysis

The IFS’ Budget 2012 briefing yesterday cut through the hyperbole to deliver a sober assessment of the red book. Their analysis of the implications of the 50p tax rate, suggested that contrary to the mooted 300,000 extra taxpayers roped into the lower 40p tax rate threshold, this figure could actually be closer to a million by 2014, adding fuel to the flames that were already raging, particularly among the usually supportive right wing media. 

A mention should also go to the Economist’s analysis. Highlighting Britain’s expertise in high-value services and the need to attract the world’s brightest, the Economist applauded Osbourne’s efforts to signal, “about as clearly as a man with no money to spare can, that Britain is open for business”.

Best gag

Sending the Government bench into raptures and consequently, Lindsay Hoyle, the Deputy Speaker, into apoplexy, Osbourne, when announcing tax breaks for the animation and video game industry in reference to this well know cartoon sketch said: “It is this Government’s determined policy that we keep Wallace and Gromit exactly where they are“. BOOM!

Best Headline

The Sun could’ve won this thrice with some absolute beauties including: “HE’S TAKING US FOR FUELS” and “GRAN THEFT OSBO.” The best ones are captured in this image courtesy of Conservative Home’s @TimMontgomerie

Best Post Budget Admission

‘We hid the papers.’ The Prime Minister’s aide unveils to the Times, Number 10’s response to the negative headlines on Thursday.

Best Punch

Miliband’s 50p tax gibe at the Government. With one question – ‘Who on the front bench would benefit personally from the 50p tax cut?’ Ed stunned the Cabinet and made his point effortlessly; we are no longer all in this together. Very clever.  

Best PR

The anti-war protesters – who employed a very, very long handle on their ‘stop the killing in Iraq and Afghanistan’ sign, which meant every interview Jon Sopel gave on College Green featured that banner in the background.

Best ‘_______ tax’ name

Whilst the half-baked pasty tax made a valiant effort, the Granny tax is set to be the classic. As a closing gambit, we quite like this spin on the Granny tax from the daily mash.

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Friday Fiver Fri, 16 Mar 2012 17:06:32 +0000 Edward Jones 1. In a late breaking development, FSA regulatory chief Hector Sants announced his resignation from the soon to be disbanded organisation. It’s an unfortunate end to a week when the FSA successfully stung another trader for insider trading. Where next for Hector? Some are already suggesting a high profile role in industry awaits.                                                                                                                                                                                                                                              

2. Budget fever grew nicely, with more leaks from Treasury than there are hangers-on at an Only Way is Essex party. In no particular order, scrapping pensions tax relief, scrapping the 50p tax rate, issuing absurdly long-dated bonds, tax breaks for the TV and film industry and raising the income tax threshold towards £10,000.

3. Following on from point number one, it seems insider trading is a crime, but one that is only punishable by removing half a bonus. Then again, based on this, the key to insider trading really is as simple as playing a popular after-dinner game with your client over the (recorded) landline at your desk.

4. Hell of a week for Tesco losing its UK boss and telling its employees they’ll have to work two years longer before they retire – on the latter they’re to be applauded for addressing the issue sooner rather than later, many more are likely to follow.

5.  Fitch joined Moody’s this week to put the UK economy on a negative outlook threatening the AAA rating. Some have said it’s a gift for George Osbourne before the budget as it will set the tone for continued austerity. Indeed the agencies have been clear that any deviation from austerity would be more disconcerting. Ed Balls’ line however, that you should never set policy by the credit ratings agencies might just get some traction, particularly given the criticisms they face.

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FPS’ Friday Fiver Fri, 25 Mar 2011 14:50:26 +0000 David Chambers Hello All! And welcome to our brand new, dedicated Financial Services blog from our FPS team here at H&K. This blog will cover all things related to finance, money, the economy, politics, consumer trends and probably a bit of humour along the way. We hope you enjoy reading it and look forward to your comments.

In the meantime, here’s this week’s Friday Five with contributions from Ed, Ross and Marie.

George Osborne's Budget has generally been well received, but more pain lies ahead

Two days on from the Budget…There’s always a mad rush to get initial reaction out on Budget Day. Two days on though, where do we stand? Our initial reaction remains largely the same – George Osborne delivered a Budget for business and one designed for growth. The question though is at what cost.

The Institute for Fiscal Studies argued yesterday that due to inflation the pain on the public sector will be even greater than originally thought as we try to cut our public spending and drive growth. Moody’s then compunded this, putting a chill on the UK with a warning that slow growth and our high debt risk our precious AAA debt rating. It’s not any rosier in Parliament for the Coalition either. Ed Miliband is picking up some momentum, his key spinners have found a more coherent message, and local elections are on the horizon – never easy for an incumbent government, especially if the Lib Dems suffer again as they did in Barnsley last month.

Never thought you'd see these two in the same image? No, us neither. Until now

What Anne Hathaway and Warren Buffett have in common…We came across a fascinating column on the Huffington Post this week. It explored the lengths financial traders are going to in order to extract the best possible return by sourcing as much information as possible, no matter its source or content.  The post noted the curious way in which Warren Buffett’s investment company, Berkshire Hathaway, saw its shares rise on occasions when actress Anne Hathaway appeared in the news. The theory goes that this is a result of automated financial trading engines picking up the chatter on Anne and applying it to the stock market.

US site, The Atlantic, picked up the story and delved a bit deeper – it’s well worth a read, but is perhaps summed up by a quote from computer scientist John Bates, who simply explains companies are now trying to “correlate everything against everything”.

Change for Takeover specialists…In a move reminiscent of the curtain opening trick in the Wizard of Oz, the UK’s merger regulator, the Takeover Panel proposed changes to its rules that would seek, among other things, to make deal fees public to increase transparency. In particular, it proposes that the maximum and minimum fees, including incentives and success fees, paid to deal advisers by both bidders and targets should be revealed.

Cadbury Law - change for takeovers, but what about for takeover advisers?

What does this mean? Ultimately, that the value M&A ‘wizards’ who provide financing, corporate broking, legal, accountancy, consulting and PR services will be open to more public and in particular shareholder scrutiny. What impact this will have is unclear though. Everyone knows that bankers make considerable fees from M&A, just as everyone knows bankers make considerable salaries and bonuses as a result of these fees. No one seems to be able to do much about the latter and so it is unlikely that much will be done about the former.

Clearly, based on the strong reputation of many of the top investment banks, people are likely to still pay good money for that wizardry. What about the rest of us though? Aided by these new transparency measures and given that knowledge is power, will M&A advisory services become more of a buyers’ market? Certainly, it will become more value-focussed, but that is not necessarily a bad thing. Whether ‘public scrutinisers’ really understand what they are evaluating is another matter.

Still waiting for the Big Society?…David Cameron’s ‘Big Society’ has received mixed reviews, but a common response has been from those who claim to not understand what it is. MPs from all parties as well as the media have often muddled the concept, perhaps to undermine it before it has even got off the ground. Credit then to The Economist which this week has analysed exactly what BigSoc is and presented it clearly without trying to induce scepticism. The paper breaks the concept down into three strands: pluralism, localism and voluntarism.

The struggle to define BigSoc has clearly served to slow down people from embracing and committing to it – is this failure to agree the reason why businesses aren’t engaging with and supporting it with any gusto at present? It remains to be seen though whether debates like The Economist’s can actually serve to shape what the Big Society is. Nearly one year on from the General Election, many would argue we’re still waiting to answer even that basic question.

David Buik - "One of the last true city gents"

Farewell to a legend…Finally, a short note on the passing of an institution. BGC Partners’ David Buik has been an ever present on TV screens, in newspaper columns and on radio for many a year, but today retires. Described by some on Twitter today as one of the last ‘true gents’ in the City, he’ll be missed.

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