Business news - live: UK economy shrank 0.2 per cent in last quarter, ONS confirms

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Economic output dropped by 0.2 per cent between April and June, the Office for National Statistics said (PA)

Official figures confirmed today that the UK economy remains teetering on the brink of recession.

Economic output dropped by 0.2 per cent between April and June, the Office for National Statistics said, reiterating its earlier estimate.

Elsewhere, Saudi Arabia's crown prince has warned the price of oil could spike to "unimaginably high" levels unless action is taken against Iran, the kingdom's main enemy.

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Key Points

• Thomas Cook refunds to take up to two months
• City watchdog cracks down on funds after Woodford scandal
• Households and government propping up UK economy as firms hold back
• UK GDP fell 0.2 per cent in second quarter
• 'No-one really knows' cost of no-deal Brexit, says Chancellor

[30 September 2019 12:04 · ben.chapman]

Thousands of ships fitted with ‘cheat devices’ to divert poisonous pollution into sea

Global shipping companies have spent billions rigging vessels with “cheat devices” that circumvent new environmental legislation by dumping pollution into the sea instead of the air, The Independent can reveal.

More than $12bn (£9.7bn) has been spent on the devices, known as open-loop scrubbers, which extract sulphur from the exhaust fumes of ships that run on heavy fuel oil.

This means the vessels meet standards demanded by the International Maritime Organisation (IMO) that kick in on 1 January.

The full story is here:

Thousands of ships fitted with ‘cheat devices’ to divert poisonous pollution into sea

[30 September 2019 13:30 · ben.chapman]

Prudential fined £24m for not treating customers fairly

Prudential has been fined £23,875,000 for selling its pension customers annuities while failing to inform them that they could obtain vbetter returns elsewhere.

Pension pots can be used to buy an annuity which gives the purchaser a guaranteed income.

Prudential has contacted most customers who may be affected, the FCA said.

More than 17,000 customers have been offered around £110m in redress so far for annuities sold between July 2008 and September 2017.

[30 September 2019 13:38 · ben.chapman]

Mortgage approvals fall to five-month low

Lenders approved 65,545 mortgages for home-buyers in August - a five-month low.

Howard Archer, chief economic adviser at EY Item Club said:

"It is possible that housing market activity may have got a recent modest lift from house-buyers looking to get their move sorted out before Brexit is due to occur on October 31 given the major uncertainties as to what exactly will happen then."

He continued: "However, the fact that mortgage approvals fell back to a five-month low in August suggests that the upside for housing market activity currently remains limited amid major uncertainties."

[30 September 2019 14:46 · ben.chapman]

Auditors face tougher rules after string of scnadals

Audit industry standards are to be tightened after a series of company failures after accountants failed to spot problems.

The UK accounting watchdog said today that auditors will need to follow "significantly stronger requirements" than at present.

Earlier this year, all four of the largest auditors that dominate the UK market - KPMG, Deloitte, EY and PwC - were found to have fallen short of the expected quality standard. 

Accountants must "robustly challenge management's assessment of going concern, thoroughly test the adequacy of the supporting evidence, evaluate the risk of management bias and make greater use of the viability statement", the Financial Reporting Council said.

[30 September 2019 15:47 · ben.chapman]

Sajid Javid promises minimum wage of £10.50 per hour

Sajid Javid has seen John McDonnell's move last week to increase the minimum wage to "at least £10 an hour" and raised him by 50p:

[30 September 2019 16:06 · ben.chapman]

Ed Davey has taken a pop at Boris Johnson over his hedge fund donors

The Liberal Democrats are adding to criticism coming from Philip Hammond and the prime minister's sister Rachel Johnson.

A number of Boris Johnson's backers have bet against the pound and stand to make large sums in the event of a no-deal Brexit, the critics claim.

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Senior Conservatives have said there is no truth to the allegations that the prime minister is helping out wealthy donors by pursuing a no-deal Brexit.

[30 September 2019 16:08 · ben.chapman]

Hammerson sells Paisley retail park

Retail property giant Hammerson has announced the sale of a Scottish retail park in a £67 million deal. The shopping centre owner told investors on Monday that it sold Abbotsinch retail park in Paisley to property investment firm Ashby Capital. Hammerson acquired the site, which houses retailers such as B&Q and Dunelm, in 2012 for £42 million and said it invested £17m into a expansion at the retail park, which increased its number of tenants from six to 14 during its ownership.

The deal means that Hammerson has secured £523m through sales this year as it looks to cut its significant debt pile. David Atkins, chief executive of Hammerson, said: "Our absolute priority is to reduce debt, and with this deal we have exceeded our target of over £500m  in disposals in 2019." Shares were up 0.6 per cent to 285.8p.

PA

[30 September 2019 16:14 · ben.chapman]

The British Chambers of Commerce is cautiously welcoming Sajid Javid's pledge to raise the minimum wage to £10.50.

BCC director general Adam Marshall said: 

The government’s ambition to raise and simplify the National Living Wage is laudable but the path to doing so must be on the basis of clear economic evidence, with ample time for businesses to adjust to any changes.

Companies already face significant cumulative employment costs, including pensions auto-enrollment, Immigration Skills Charge and the Apprenticeship Levy, so government must take action to alleviate the heavy cost-burden facing firms, or risk denting productivity and competitiveness.

[30 September 2019 16:20 · ben.chapman]

WeWork cancels IPO

WeWork has said it will withdraw it's initial public offering after a disastrous few weeks in which controversial chief executive Adam Neumann was ousted following an ice-cool reception to the company from investors.

The decision was widely expected after the troubled start-up said earlier this month it would suspend its plans to list.

Wall Street balked at a sky-high valuation, that reached as high as $47bn in January. Reuters reported that WeWork had slashed that to as low as $10bn but still struggled to drum up interest.

Major concerns had been raised about the company's unusual governance structure and a business model that relies on taking out long-term leases on buildings but renting out space to its tenants on short-term contracts.

This leaves WeWork extremely vulnerable to an exodus of customers during a downturn.

[30 September 2019 16:27 · ben.chapman]

An 'infrastructure revolution' is on the way

The chancellor has promised another £29bn for road-building projects over the next five years.

Much of Britain's infrastructure is crumbling after years of under-investment.