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Trump win, Tesco Bank, RBS and payday loans

9 November 2016

10:20 AM

9 November 2016

10:20 AM

There’s really only one story this morning – and the markets agree. After Donald Trump beat Hillary Clinton to become the next President of the US, global markets are in chaos, the dollar has plummeted and, as widely predicted in the event of a Trump win, gold prices have soared.

UK stocks mirrored their US counterparts and the FTSE 100 index was down about 0.5 per cent to 6,812 in the first hour of opening. Other major European stock markets are also lower. However, according to the BBC, neither markets nor currencies have swung as wildly as they did after June’s Brexit vote. The pound has strengthened against the dollar, rising 0.3 per cent to go back above $1.24, while the euro is 0.4 per cent higher against the US currency.

The BBC reports that ‘concerns about the impact of a Trump presidency on the Mexican economy saw its currency, the peso, fall more than 13 per cent against the dollar to its lowest level in two decades’.

Tesco Bank

Bank has revealed that the ‘unprecedented’ attack on its online accounts at the weekend resulted in the loss of £2.5 million, The Guardian reports. In addition, the supermarket’s banking business has revised down the number of accounts from which money was removed from 20,000 to 9,000 and announced that banking services had been restored for all its customers.

RBS

Royal Bank of Scotland will compensate approximately 12,000 small business customers that it allegedly mistreated in the wake of the financial crisis to the tune of £400 million.

Its Global Restructuring Group had been accused of buying assets cheaply from failing firms it claimed to be helping. But City regulators concluded that RBS did not ‘artificially engineer’ the transfer of customers to GRG.


Panama Papers

A total of 22 people face civil and criminal investigations into suspected tax evasion following the disclosure of the Panama Papers, according to The Guardian.

The Chancellor Philip Hammond told MPs that a further 43 wealthy individuals were under review while their links to the offshore files were investigated further. He made the comments in a written answer to the House of Commons explaining what had happened since the offshore tax files emerged.

Payday loans

Nearly two years on from tough regulations implemented by the Financial Conduct Authority, the payday loan market continues to show signs of irresponsible lending and poor treatment of people in financial difficulty, according to a new report from StepChange Debt Charity.

The proportion of people coming to the charity with payday loan debts has fallen from its peak of 23 per cent in 2013 to 16 per cent this year, but the report identifies persistent and new issues that show regulation and political pressure have by no means fixed the market.

The report also questions whether regulation is falling behind changes in the market, with lenders shifting from the traditional 30-day payday loan to more costly, longer term instalment loans.

The charity is calling on the FCA to finish the job of tackling these problems during the upcoming review of payday loans, and is calling on the Government to help by looking at new forms of affordable credit for those that need it the most.

Mortgages

Landlords who earn less than £43,000 a year have been spared a crackdown on risky loans, the Daily Mail reports.

Britain’s biggest buy-to-let mortgage lender, BM Solutions, says it won’t be reducing the amount it will lend to basic-rate taxpayers. By contrast, higher-rate taxpayers may have to collect higher rents from their tenants or save for a bigger deposit to get the loan they want.

Finally…

If you’re going to lose a tooth, make sure you get to Northern Ireland, because the tooth fairy is more generous there than any other region in the UK, according to the latest research from SunLife.

As part of its Cash Happy report, SunLife looked at the day to day finances of more than 3,000 UK households and found that on average, the tooth fairy leaves £1.42 under children’s pillows across the UK – a 8 per cent increase on last year’s average of £1.31.


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