Good morning! Here’s what you need to know on Wednesday.
1. Banks will start taking “irreversible” decisions such as moving staff abroad if no Brexit transition deal is agreed by the end of this year, the head of the City watchdog has warned. Sky reports that Andrew Bailey, chief executive of the Financial Conduct Authority (FCA), told MPs that would be “the point at which these things start happening” as firms look to be ready for the UK’s departure from the EU in March 2019.
2. Bailey was criticised by MPs yesterday for slowness, complacency and methodological failings in its investigation into the scandal of small companies being deliberately mistreated by Royal Bank of Scotland, the Times reports. Bailey and John Griffith-Jones, his chairman, both appearing before the Treasury select committee, came under fire over the three-year wait for publication of even an abridged report into the so-called GRG affair.
3. BP investors sent shares in the oil major to its highest price this year after the supermajor more than doubled its profits in the last three months, driven by a five-year high in earnings for its fuels, petrochemicals and refining businesses, the Telegraph reports. The company said the profit bonanza would trigger the start of a share buyback scheme to ease the irritation of a scrip dividend put in place to help protect its balance sheet during the oil market downturn.
4. The UK’s property market will take this week’s expected rise in interest rates in its stride, according to ratings agency Moody’s, but it warned that the outlook for the buy-to-let market has worsened significantly, the Guardian reports. The agency, which along with Standard & Poor’s was widely condemned for awarding triple-A ratings to sub-prime mortgage books before the 2008 financial crisis, said the British property market is more resilient than is widely believed.
5. The advertising group WPP has lowered its growth forecasts for the third time this year amid shrinking client budgets, but said its UK business was benefiting from Brexit uncertainty, the Guardian reports. Sir Martin Sorrell, the WPP chief executive, said the UK market was stronger than other parts of the world as firms opted to invest in advertising and marketing campaigns rather than commit to major spending on buildings and machinery.
6. Burberry is set for a radical fashion makeover after announcing that its long-serving creative designer, Christopher Bailey, is leaving after 17 years with the luxury brand, the Telegraph reports.The British fashion house revealed that Mr Bailey, 46, will step down next March from the board but will continue to provide “full support” to Burberry’s team, which includes new boss Marco Gobetti, until the end of 2018.
7. Asian shares looked set to extend their gains into a fourth straight day on Wednesday on the back of solid economic growth, while oil prices were on a bull run on hopes of an extension of output cuts by major oil producers, Reuters reports. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.3% in early trade while Japan’s Nikkei gained 1.0%.
8. Learndirect, the former UK state-owned training provider, has won a last-ditch reprieve from its lenders as it seeks to rebuild its finances in the wake of a controversial report by the education watchdog, Sky reports. A syndicate including Lloyds Banking Group and Royal Bank of Scotland (RBS) agreed to extend a £5m working capital facility to Learndirect ahead of a deadline for filing its accounts on Tuesday.
9. A bitter dispute between some British Airways cabin crew and management has ended after almost a year, the Independent reports. Cabin crew members of the Unite union working for BA’s mixed fleet unit at Heathrow have accepted a pay deal by a majority of five to one.