HSBC warns on China, Britain slowdown as 2018 profit disappoints

HONG KONG/LONDON (Reuters) – HSBC Holdings turned in a disappointing annual profit as higher costs and a stocks rout chipped away at its trading businesses, while warning that an economic slowdown in China and Britain would throw up further hurdles this year.

Chief Executive John Flint, rounding off his first year at the helm of the company, said the bank may have to scale back investment plans in order to avoid missing a key target known as ‘positive jaws’ – which tracks whether it is growing revenues faster than costs – for a second straight year.

HSBC remains alert to the downside risks of the current economic environment, global trade tensions and the future path of interest rates, Flint said, adding the bank was “committed” to the growth targets announced in June.

“We will be proactive in managing costs and investment to meet the risks to revenue growth where necessary, but we will not take short-term decisions that harm the long-term interests of the business,” Flint said on Tuesday, after HSBC reported a lower-than-expected 16 percent rise in 2018 profit before tax.

In June, Flint had said HSBC would invest $15-$17 billion in three years in areas including technology and China, while keeping profitability and dividend targets little changed.

“The key thing is just to moderate the pace of investments … not to cancel it or change the shape of the investments,” Flint told Reuters.

The bank said it failed to achieve positive jaws in 2018 due to the negative market environment in the fourth quarter.

A combination of U.S.-China trade tensions, central banks turning off the money taps and cooling growth in former hot spots wiped 10 percent off MSCI’s 47-country world stocks index last year, its first double-digit loss in any year since the 2008 global financial crisis.


Flint’s comments come as an economic slowdown in China, exacerbated by a bitter Sino-U.S. trade war, challenges HSBC’s strategy of pouring more resources into Asia where it already makes more than three quarters of its profits.

China’s economic growth slowed to 6.6 percent in 2018, the weakest in 28 years, weighed down by rising borrowing costs and a clampdown on riskier lending that starved smaller, private companies of capital and stifled investment.

Pressure on the world’s second-largest economy could increase if Beijing and Washington do not reach a deal soon to end their year-long trade dispute, which is taking a growing toll on export-reliant economies from Asia to Europe.

HSBC’s profits in Asia grew by 16 percent to $17.8 billion last year, accounting for 89 percent of the group profit.

“Clearly our customers are really more cautious and are more thoughtful around this trade war with the U.S.,” Flint said.

“It’s possible that we’ll see slightly lower growth rate this year but we are still going to see a growth rate.”

Since taking over from Stuart Gulliver last February, Flint has largely stuck to the same China-focused strategy as his predecessor while attempting to revive HSBC’s ailing U.S. franchise and putting less emphasis on its investment bank.

Europe’s biggest bank by market value is also being buffeted by headwinds from Britain, which grew at its slowest in half a year in the three months to November as factories suffered from tough global trade conditions and the approach of Brexit.

HSBC joined its London-based peer Royal Bank of Scotland in warning that uncertainties related to Brexit could drive businesses under.

“The longer we have the uncertainty the worse it’s going to be for the customers. Customers are absolutely postponing investment decisions … and that’s been the part of this slowdown that we have seen in the U.K.,” Flint said.


Earlier in the day, HSBC reported a profit before tax of $19.9 billion for 2018, versus $17.2 billion the year before, but below an average estimate of $22 billion, according to Refinitiv data based on forecasts from 17 analysts.

HSBC’s Hong Kong shares dropped as much as 2.7 percent after the earnings announcement.

The stock was down 1.4 percent at 0732 GMT, while the Hong Kong market index was 0.3 percent lower.

HSBC said it would pay a full-year dividend of $0.51 per share, roughly in line with analysts’ expectations. The bank was confident of maintaining the dividend at this level, it said.

The bank’s core capital ratio, a key measure of financial strength, fell to 14 percent at end-December from 14.5 percent at end-2017, mainly due to adverse foreign exchange movements.

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Captain Marvel and Spider Man star in stunning new Royal Mail Marvel stamps

UK’s contribution to some of Marvel’s iconic comic stories is being celebrated in a new collection of Royal Mail stamps.

The 15-stamp set includes some of the most popular heroes in the firm’s history.

Stamps show Avengers such as Spider-Man, Hulk, Thor, Iron Man, Doctor Strange and Black Panther as well as British heroes Peggy Carter; Captain Britain and Union Jack.

Captain Marvel, set to star in the next Marvel Studios cinematic release, also gets her own stamp.

As well as the main character stamps, Royal Mail has produced a 10-panel comic in stamp form, where five of the panels are also stamps.

The story is called Avengers UK and sees Captain Britain rallying the heroes to face arch villain Thanos.

The stamps were illustrated by Alan Davis, who has worked with Marvel since the early 1980s and first illustrated Captain Britain in 1985.

Philip Parker, Royal Mail, said: “Generations have grown up, spellbound by the adventures and the personalities of these Super Heroes. Our epic new stamps celebrate each in characteristic pose, emerging from the stamp frame.”

Davis, said: “I really can’t take all the credit for producing these stamps. The speed of production required in US comics makes it necessary to separate the creative disciplines into four individual jobs. Writer, penciller, inker and colourist. My primary focus is writing and pencilling. 

“My long-time collaborator Mark Farmer supplied the blackline inks for the stamps and Laura Martin added the colour.”  

The are available now to pre-order from  and go on general sale from Thursday 14 March in Post Offices and by phone on 03457 641 641.

Here are the stamps in detail:

Doctor Strange

Once a brilliant yet vain neuro-surgeon, Stephen Strange sought out the help of the Ancient One when his hands were badly damaged in a car crash.

Strange’s path led him to become a Master of the Mystic Arts and Earth’s Sorcerer Supreme, protecting the world from evil forces.


The mighty Thor is the Norse God of Thunder. Once cast out of Asgard for his pride, he was trapped on Earth as the injured doctor, Donald Blake.

Thor’s banishment is long ended and now he protects both Earth and Asgard as an Avenger.

Captain Marvel

Carol Danvers was an Air Force officer when she met Kree hero Captain Mar-vell. After her DNA mixed with his during an explosion, she gained super powers and took the name Ms Marvel.

Following the original’s death, Carol took on the mantle of Captain Marvel to honour his legacy. Marvel Studios’  Captain Marvel  is in cinemas from 8 March, 2019.


Peter Parker is Spider-Man, New York’s amazing web-slinging hero.

Bitten by a radioactive spider as a teenager, Peter Parker gained arachnid-like abilities and, after his Uncle Ben was murdered, swore to use his abilities to help others – having realised that with great power comes great responsibility.

Black Panther

T’Challa is the Black Panther, ruler of the technologically advanced African nation of Wakanda and protector of its valuable vibranium supply.

T’Challa first travelled to America to learn more about the country’s heroes and soon became a leading member of the Avengers.


When mild-mannered scientist Bruce Banner was bombarded by radiation from a gamma bomb, he was transformed into the Incredible Hulk.

The green-skinned behemoth is one of the planet’s most powerful and misunderstood heroes – feared by a world he has saved numerous times.

Peggy Carter

Peggy Carter was working for the French Resistance in the Second World War when she met and fell in love with Captain America.

The two fought the Axis powers together before they were separated by the war.

Peggy went on to become a leading agent of S.H.I.E.L.D. (Strategic Homeland Intervention, Enforcement and Logistics Division).

Union Jack

The original Union Jack was Lord James Falsworth, who fought in the First World War.

When his descendant refused to take on the role, the mantle was passed to Joey Chapman, a working class hero from Manchester, who has gone on to fight alongside the Knights of Pendragon and the Invaders.

Captain Britain

Brian Braddock was chosen by Merlyn to be Britain’s greatest protector. Granted amazing powers, Brian became Captain Britain.

He soon learned he was part of a multidimensional Captain Britain Corps and has fought alongside Excalibur and the Avengers to keep his country – and the world – safe from harm.

Iron Man

When terrorists captured billionaire inventor Tony Stark, they forced him to create weapons.

With shrapnel near Stark’s heart endangering his life, Stark tricked the terrorists, building a suit of powered armour to defeat them.

It was the birth of the armoured Avenger – the invincible Iron Man.

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Hidden treasures – could you have any of these?

  • The old iPods now worth £670 each
  • The Boba Fett figure now worth £10,000
  • The £50,000 ‘rock’ found on a beach
  • These retro Walkmans worth £100s
  • Rare Harry Potter books
  • Console games now worth £1,793
  • Valuable comics
  • The records worth more than a HOUSE

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British supermarkets battle to secure stocks as chaotic Brexit looms

LONDON (Reuters) – Britons could face shortages of fresh food, price rises and less variety if the country leaves the European Union next month without agreeing trade terms, food industry officials say.

With no deal in sight as Britain’s March 29 exit date approaches, supermarkets are stockpiling, working on alternative supplies and testing new routes to cope with an expected logjam at the borders but say they face insurmountable barriers.

“You can’t stockpile fresh produce, you haven’t got any space and it wouldn’t be fresh,” said Tim Steiner, head of online supermarket pioneer Ocado.

The warnings, including talk of whether rationing would be needed, are part of a chorus of concern from businesses who say they are weighed down by uncertainty in what was once considered a bastion of Western economic and political stability.

The last time Britain’s food supplies were seriously hit was when fuel protests prompted panic buying almost two decades ago, forcing some supermarkets to ration milk and bread and others to warn that stocks would run out in days.

Executives within the food chain said Britain was better prepared than 2000, but disruption may be more widespread and last longer than the few days it took before the fuel dispute was settled.

James Bielby, head of the Federation of Wholesale Distributors, says its members’ retail and catering customers were asking for between one and eight extra weeks’ supply. But storage is limited in an industry that operates on a “just in time basis” to maximize the shelf life of goods.

Intense competition and slim margins in the British supermarket sector have also made contingency planning more complicated. James Walton, chief economist at IGD which works with the industry to improve supply chains, said storage had been reduced over many decades to hold down working capital.

What remains is now full. “So surplus space within stores is being used and containers are in carparks,” he said.

Mike Coupe, the boss of Britain’s second biggest supermarket Sainsbury’s, said supplies would not last long. “We don’t have the capacity and neither does the country to stockpile more than probably a few days’ worth,” he said in January, echoing the supermarket’s warning to then-Prime Minister Tony Blair in 2000 during the fuel crisis.


Britain imports around half of its food, and while some is flown in via air freight, most enters on lorries through Dover, Britain’s main gateway to Europe.

At peak times, 130 lorries a day are required to drive through Dover bringing citrus fruit alone, according to the British Retail Consortium. In March, inclement British weather means 90 percent of lettuces come from the EU.

If it leaves without a trade deal, Britain will move on to World Trade Organization rules that require tariffs to be paid, goods to be checked and paperwork to be completed, demands that do not currently exist for goods coming from within the EU.

The English Apples & Pears group said British farms have been asked to provide more apples until the end of April by retailers who usually source more from the southern hemisphere from March.

Other substitutions are more difficult.

“People just say we’ll eat more British produce but … would people be happy to start eating tonnes of British leeks? I’m not sure,” said an executive at one of Britain’s four major supermarket groups, who declined to be named because of the possible business impact.

“We have to plan for the worst,” he said, before adding that he hoped Britain would delay its departure date from the EU.


Consultants, suppliers, company sources and trade groups said importers were looking at securing new routes into Britain in case customs checks clog up Dover, but no other port offers that frequency of ferry sailings or trains through the tunnel.

They would also have to compete with companies importing drugs, car parts and chemicals that are also looking to alternative ports on the south and east coast of Britain.

The Spanish wine federation said they had advised members to avoid shipping goods to Britain around the end of March.

Supermarkets could fly in more goods – as they did to bring in lettuces from America in 2018 when bad weather hit European supplies – but it is expensive and capacity is limited.

William Bain, a policy adviser at the British Retail Consortium, said clients and suppliers were having talks now to discuss how costs and risks would be shared if stock is delayed.

Elsewhere in the food chain, suppliers of ready meals are considering changing ingredients to remove those with the shortest shelf life, according to the Fresh Produce Consortium.

All of these changes could lead to higher prices however, with changes to recipes requiring changes to labeling.

Dominic Goudie, in charge of exports, trade and supply chains at the Food and Drink Federation, told Reuters prices were likely to rise, regardless of the outcome.

“We know from our members that they are investing staggering sums into getting ready for the worst possible no-deal scenario,” he said. “The sums are so large that manufacturers need to pass it on to their customers, the retailers.”

Another senior executive at a major British food retailer told Reuters they had seen no signs yet of Britons buying so-called ‘bunker lines’ – toilet paper, bottled water and tinned food. But it could happen before March 29.

“If you’ve got a limited amount of food, you want to distribute it fairly across the country,” he told Reuters. “So you almost get to this ridiculous notion of rationing.”

Some of Britain’s deeply-divided politicians who are seeking a complete break with the EU say the economy would soon recover from any short-term hit as it adapts to new trading routes after Brexit.

They argue that talk of food shortages and rationing is scaremongering driven by the government to rally support for Prime Minister Theresa May’s proposed Brexit deal, agreed with the EU but showing little sign of getting sufficient support from her own parliament.

Environment minister Michael Gove, who backed Brexit, has said leaving without a deal could lead to higher prices, but that the government has chartered extra ferries to maintain the movement of goods. “We are meeting weekly with the food industry to support their preparations for leaving the EU,” a spokesman said.

Tesco chairman John Allan said the retailer, Britain’s biggest with 3,400 stores and almost 28 percent of the market, was stockpiling goods with a long shelf life but that its options for fresh produce was more limited.

“So provided we’re all happy to live on Spam and canned peaches all will be well,” he added.

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Room at the top: Co-working helps ensure Dublin keeps its place in the top 30 cities for tech

Dublin has been ranked 19th out of the top 30 cities in the world as an environment for the technology sector, boosted by access to so-called co-working spaces.

The ‘Tech Cities in Motion’ index from property agent Savills measured cities based on six categories; business environment, tech environment, city buzz and wellness, talent pool, real estate costs, and mobility.

From this it determines which are the best homes for tech and startup firms.

The expansion of co-working has gone hand in hand with the growth of the global tech sector.

A relatively new phenomenon in Ireland, flexible-leasing co-working spaces are becoming increasingly popular with the likes of WeWork and Huckletree snapping up spaces in the city centre.

According to the index, co-working providers accounted for 13pc and 13.5pc of office market take-up in London and Dublin respectively in the first nine months of 2018.

In Dublin, the average cost for a co-working desk in a private office is $670 (€593) per month. This is higher than the average cost of $590 (€522) across the 30 cities in the index.

The highest co-working cost for a desk in a private office can be found in San Francisco, where it will set you back around $1,050 (€930) per month.

“[This] sector is rising fast globally, but there is room for growth,” the index added.

Dublin also performed strongly in the sub-category of quality of urban infrastructure, where it placed 10th out of the 30 cities.

Meanwhile, in terms of its tech environment, the city ranked 15th for volumes of venture capital investment.

New York topped the ranking, overtaking San Francisco to become the world’s top tech city.

The ‘Big Apple’ performed strongly for employers’ access to a deep talent pool, and the city’s reputation as a global business centre.

In addition, venture capital investment volumes in New York have been higher than those recorded in San Francisco for the last three years.

Despite concerns about the UK’s impending exit from the European Union and what it will mean for the UK economy, London ranks in the top three cities for global tech.

The city performed especially well in the ‘buzz and wellness’ and mobility sub-metrics.

In addition, there was three times more venture capital investment recorded in London last year than the nearest European rival for such investment, Paris.

Elsewhere, tech cities in China have risen fast, and now account for a higher share of venture capital investment than their US counterparts.

Beijing recorded an average $34bn (€30bn) of venture capital per year in the last three years, volumes higher even than New York and San Francisco.

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Honda Swindon closure a ‘shattering body blow’ for UK manufacturing says union

Honda has been urged to “think again” about closing its plant in Swindon, with the loss of up to 3,500 jobs.

Another 10,000 jobs could be under threat in the supply change and support services. The Japanese car giant looks set to make a formal announcement about the future of the Swindon plant on Tuesday.

So far Honda hasn’t commented on reports of the Swindon shutdown. Less than six months ago bosses pledged their support for the factory.

After a meeting with company executives and Business Secretary Greg Clark, Swindon’s Tory MPs Justin Tomlinson and Robert Buckland said they were “disappointed and surprised” by the news, adding that job losses were not expected until 2021.

Speaking to ITN, Mr Buckland said Honda should “think again and I certainly would be ready to talk to them and anybody who cares to listen to make the case for Swindon as a strong centre for manufacturing”.

Honda produces well over 100,000 Civic cars a year at Swindon, which is the company’s only factory in the EU and has been turning out vehicles for more than 30 years.

The decision to close, if confirmed, is likely to have been based on a number of factors. The car industry generally is coming under increasing pressure from falling sales in Europe.

The trade deal signed between Japan and the EU removed tariffs on cars imported from Japan into Europe, therefore reducing the need for Europe-based production.

Although it may not have been the main reason, the uncertainty around Brexit is also likely to have played a part in the decision.

Indeed the Unite union has described the closure as a “shattering body blow at the heart of UK manufacturing” which it claims has been “brought low by the chaotic Brexit uncertainty created by the rigid approach adopted by prime minister Theresa May”.

Unite national officer for the automotive sector Des Quinn said: “The 3,500-strong workforce do skilled, well paid jobs that the UK can ill-afford to lose.

“We will be doing everything we can in the coming days and weeks to support our members at this grave time for them, their families and the UK economy.

“This will also affect thousands of jobs in the extensive supply chain across the country. This would be the single biggest automotive closure since Rover in 2005.

“Business Secretary Greg Clark needs to make an urgent statement on what the government intends to do to rectify this dire situation, if the reports prove correct.

“It appears that the chickens are coming home to roost big-time because of Brexit uncertainty.

“If the government had advance warning of this dreadful news and did not alert the unions, this is an appalling and cavalier attitude by ministers.”

If the closure is confirmed it will be the latest in a series of setbacks for the UK car industry, following on from this month’s announcement from Nissan that it would not be building its X-Trail SUV at its Sunderland plant.

Source: Read Full Article

Auto industry lines up against possible U.S. tariffs

WASHINGTON (Reuters) – The U.S. auto industry urged President Donald Trump’s administration on Monday not to saddle imported cars and auto parts with steep tariffs, after the U.S. Commerce Department sent a confidential report to the White House late on Sunday with its recommendations for how to proceed.

Some trade organizations also blasted the Commerce Department for keeping the details of its “Section 232” national security report shrouded in secrecy, which will make it much harder for the industry to react during the next 90 days Trump will have to review it.

“Secrecy around the report only increases the uncertainty and concern across the industry created by the threat of tariffs,” the Motor and Equipment Manufacturers Association said in a statement, adding that it was “alarmed and dismayed.”

“It is critical that our industry have the opportunity to review the recommendations and advise the White House on how proposed tariffs, if they are recommended, will put jobs at risk, impact consumers, and trigger a reduction in U.S. investments that could set us back decades.”

Representatives from the White House and the Commerce Department could not immediately be reached.

The industry has warned that possible tariffs of up to 25 percent on millions of imported cars and parts would add thousands of dollars to vehicle costs and potentially devastate the U.S economy by slashing jobs.

Administration officials have said tariff threats on autos are a way to win concessions from Japan and the EU. Last year, Trump agreed not to impose tariffs as long as talks with the two trading partners were proceeding in a productive manner.

“We believe the imposition of higher import tariffs on automotive products under Section 232 and the likely retaliatory tariffs against U.S. auto exports would undermine – and not help – the economic and employment contributions that FCA, US, Ford Motor Company and General Motors make to the U.S. economy,” said former Missouri Governor Matt Blunt, the president of the American Automotive Policy Council.

Some Republican lawmakers have also said they share the industry’s concerns.

In a statement issued on Monday, Republican Congresswoman Jackie Walorski said she fears the Commerce Department’s report could “set the stage for costly tariffs on cars and auto parts.”

“President Trump is right to seek a level playing field for American businesses and workers, but the best way to do that is with a scalpel, not an axe,” she added.

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Citi to double Brazil commercial bank unit's assets by 2020

SAO PAULO (Reuters) – Citigroup Inc plans to double its Brazilian commercial banking unit’s assets by 2020, thanks to growth in loans to mid-sized companies, department head Antonio Rubens told journalists on Monday.

The bank’s commercial unit has roughly 5 billion reais ($1.34 billion) in assets, out of 75 billion reais for Citi’s Brazilian operation as a whole, most of it dedicated to larger corporations.

Rubens said those assets jumped by 27 percent in 2018 as an economic recovery increased demand. Deposits grew 10 percent to 3 billion reais.

Citi is targeting firms with between 200 million and 1.8 billion reais in revenues, he said.

This move underscores a shift in Citi’s strategy in Brazil toward wholesale activities after selling its retail assets there to Itaú Unibanco Holding SA for 710 million reais.

($1 = 3.7294 reais)

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Honda to stun ministers with closure of Swindon factory

Honda is preparing to announce the closure of its factory in Swindon, dealing a devastating blow both to its 3,500-strong workforce and ministers’ hopes that the UK will remain an elite manufacturing economy after Brexit.

Sky News has learnt that the Japanese car manufacturer could disclose the plan as soon as Tuesday morning.

A Honda spokesman did not return calls seeking comment on Monday.

If confirmed, the move will represent a further savage blow to Britain’s automotive sector amid enormous uncertainty surrounding the terms of future trade with the European Union.

A source close to Honda said the company was expected to close its plant in Swindon in 2022, although the company will retain its European headquarters in Bracknell, Berkshire, as well as its Formula One racing team operations in the UK.

:: Honda UK plant to halt production for six days after Brexit

The decision to permanently shut the Swindon factory will stun trade unions, and potentially put thousands of additional jobs at risk in the automotive industry supply chain and supporting businesses.

Honda produces well over 100,000 Civic cars at Swindon, which is the company’s only factory in the EU.

While factors other than Brexit are said to have contributed to Honda’s decision, the timing of its announcement is likely to be viewed as an incendiary development with a no-deal Brexit potentially just under six weeks away.

Theresa May attempted to reassure business leaders last week that an agreed departure from the EU remained the likeliest outcome, but was warned during a conference call that companies including Ford were accelerating plans to divert jobs and investment abroad.

Honda has manufactured vehicles in Swindon for more than 30 years, and insisted as recently as last autumn that it was committed to UK-based production regardless of the outcome of Brexit negotiations.

“The UK forms part of our global network of manufacturing plants, so the only place we produce the vehicle we produce at Swindon is in Swindon itself,” Ian Howells, Honda Europe’s senior vice-president, told the BBC in September.

“The logistics of moving a factory the size of Swindon would be huge and as far as we’re concerned, we’re right behind supporting continued production at Swindon.”

Honda has previously said that a no-deal Brexit would cost it tens of millions of pounds.

Sources said that Honda was likely to relocate the manufacturing capability at Swindon to its home market of Japan.

The ability to guarantee tariff-free exports to the EU is understood to have been among the factors persuading the company of the merits of its decision.

It was unclear whether the government securing a wide-ranging free trade deal with the EU would have any impact on the company’s decision, but one source pointed out that it would be highly unusual for such an announcement to be made unless it was deemed to be irreversible.

The Honda announcement comes just weeks after it said it was shedding hundreds of temporary staff at its Swindon plant because of an industry-wide decline in diesel car sales.

Honda’s fellow Japanese vehicle manufacturer, Nissan, dealt a severe blow to the government earlier this month when it said it was cancelling plans to build its X-Trail SUV at its Sunderland factory.

That came despite a secret pact struck between the government and Nissan in 2016 which was supposed to ensure that the company would not be competitively disadvantaged, regardless of the fate of Mrs May’s Brexit deal.

Greg Clark, the business secretary, is expected to address the EEF, the manufacturers’ body, this week, when he is likely to face questions about the possible erosion of Britain’s manufacturing base.

Airbus, the aerospace group which also employs thousands of people in Britain, has intensified threats to withdraw from the UK in the event of a hard Brexit, warning that while it would not close factories “overnight”, their future would be increasingly uncertain.

:: Airbus helps No 10 ‘make clear’ impact of no deal Brexit

In recent months, a number of big overseas carmakers, including BMW, have said they plan to idle factories for short periods soon after Brexit‎, in many cases bringing forward annual summer shutdowns.

The car industry operates on a just-in-time production basis, meaning delays to parts imports carry ‎huge financial costs.

Job cuts have also formed part of the automotive sector’s growing response to Brexit, with Ford confirming recently that it is cutting up to 400 jobs at its Bridgend engine plant.

Last month, Indian-owned Jaguar Land Rover said it would axe 4,500 jobs, many of them management roles in the UK.

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Just 1 in 14 families have taken up Tax Free Childcare since launch

Less than 100,000 people used the Government’s Tax Free Childcare scheme in December, official figures show.

An estimated 91,000 families have taken up the benefit, which gives parents a £2 bonus for every £8 they spend on childcare a year.

That’s out of the 1.3 million people that qualify for the help – suggesting a huge flaw in the system could be leaving many hard-working families worse off.

It follows a pause in the roll-out of Tax Free Childcare after it went live in 2017, following dozens of complaints over technical glitches online that left parents unable to pay their childminder.

More recently, huge delays on the website in December meant many nursery providers weren’t paid – leaving parents to fork out for late payment fines without their knowledge.

Now almost a year after teething issues were fixed, overall take-up is still far lower than anticipated.

In total, an estimated, meaning only around one in 14 eligible families has done so – just 22% of those eligible.

"Given that many parents across the country  are continuing to struggle with the cost of childcare, the fact that this flagship childcare scheme has had so little take-up demonstrates just how poorly this policy has been rolled-out," explained Neil Leitch, chief executive of the Early Years Alliance.

"Ongoing technical issues have meant that many parents still struggle to complete the simplest of tasks, even just signing up for the scheme, or reconfirming their eligibility. And of course, the regressive nature of this policy – as those who can afford to put the most into their childcare accounts get the greatest support from government – means that for many families on lower-incomes, it simply isn’t worth the hassle.

"With the government spending much less than budgeted on this flawed initiative, there is simply no excuse for ministers not to use this money to better support parents and early years providers.

"This means not only investing into the IT systems needed to ensure tax-free childcare functions as it should, but also ensuring that the funding going to frontline early years providers is enough to enable them to provide quality, accessible and affordable care and education, both now and in the long term."

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Financial support for parents

  • Grandparents Credit
  • Tax-free Childcare
  • 30 Hours Free Childcare
  • Paternity Pay
  • Workplace rights for parents
  • Maternity Allowance
  • Statutory Maternity Pay
  • Shared Parental Leave

What is Tax Free Childcare and 30 Hours Free Childcare?

Tax-Free Childcare launched in April 2017 and is now open to applicants in England.

To apply, you’ll have to go through Childcare Choices . If successful, you’ll be asked to open an NS&I account which you can then pay cash into to pay your childcare provider (providing they’re registered with Childcare Choices).

For every £8 that families or friends pay in, the Government will make a top-up payment of an additional £2, up to a maximum of £2,000 a child each year (or £4,000 for if the child has a disability).

30 hours free childcare is another scheme designed to support working parents – it launched in September 2017.

The scheme allows all working parents in England to claim an extra 15 hours a week in care for free.

To apply for any of the above, parents must both be working and each earning at least £120 a week (on average) and not more than £100,000 each a year.

You can find out more about tax free childcare, here and 30 hours free childcare, here .

Read More

Cut the cost of childcare

  • New £2,000 Tax-Free Childcare Scheme
  • Apply for 30 hours free childcare
  • Grandparents missing out on £231 a year
  • Childcare: What you’re entitled to
  • The £195.70 a week parents are missing
  • Cost of raising a child leaps to £87,000
  • 1,000s of 2-year-olds missing free care
  • Childcare costs soar 27%

Source: Read Full Article

World stocks lifted to 2-1/2 month highs by trade optimism

London (Reuters) – Hopes of progress in Sino-U.S. trade talks and expectations of policy stimulus from central banks lifted world stocks to 2-1/2 month highs on Monday, though European gains were dampened by concerns over the car sector’s outlook.

MSCI’s All-Country World Index rose 0.3 percent after Japan’s Nikkei closed up 1.8 percent at its highest level of the year and MSCI’s index of Asian equities rose almost 1 percent. Shanghai blue chips surged 2.7 percent to their highest finish in more than six months.

Wall Street futures suggested that U.S. stocks would hold onto last week’s gains when trading starts.

The Dow and the Nasdaq boasted their eighth consecutive week of gains on wagers the world’s two largest economies would hammer out an agreement resolving their protracted trade dispute. [.N]

Negotiations will resume this week, with U.S. President Donald Trump saying he may extend a March 1 deadline for a deal. Both sides reported progress at last week’s talks in Beijing.

The mood was more subdued in Europe, where a pan-European equity index inched to new four-month high as gains were capped by the auto sector, hit by data showing Chinese car sales fell 16 percent in January, their seventh straight month of decline.

The autos index, a bellwether for Europe’s economy, fell 0.65 percent, also pressured by fears that a U.S. Commerce Department report to Trump could unleash steep tariffs on imported cars and auto parts. German shares fell 0.25 percent.

Trump has 90 days to decide whether to act upon the recommendations.

“The optimism on trade has been strong, but the underlying economic data has been a lot of weaker – so you have some push and pull factors,” said David Vickers, senior portfolio manager at Russell Investments, adding much focus was now on flash PMI data due out this week.

“As the bounce-back from the December lows fades…the fundamentals now reassert (themselves),” Vickers added.

A run of soft economic data has fueled expectations that the world’s most powerful central banks could deliver on reflationary policies and provide support for markets.

The need for stimulus was highlighted by data showing a sharp slide in Singapore exports and a big drop in foreign orders for Japanese machinery goods.


Beijing is already taking action, with China’s banks making the most new loans on record in January in an attempt to jumpstart sluggish investment.

Minutes of the Federal Reserve’s last policy meeting are due on Wednesday and should provide more guidance on the likelihood of rate hikes this year. There is also talk the bank will keep a much larger balance sheet than previously planned.

“Given the range of speakers since the January meeting who support “patience,” the Fed minutes should reiterate a dovish message overall,” analysts at TD Securities said in a note.

The dollar was steady on the yen at 110.52, having backed away from a two-month top of 111.12.

Sterling drifted higher after registering three consecutive weeks of losses as investors waited for the outcome of Brexit talks between Britain and the European Union.

British Prime Minister Theresa May plans to speak to every EU leader and the European Commission chief to seek changes to her EU withdrawal agreement, after another defeat from her own lawmakers last week.

That left the dollar a shade lower at 96.705 against a basket of currencies and away from last week’s top of 97.368.

On commodity markets, oil prices reached their highest for the year, buoyed by OPEC-led supply cuts and U.S. sanctions on Iran and Venezuela.

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