Skip Header
Important information: The value of investments can go down as well as up so you may get back less than you invest. Investors should note that the views expressed may no longer be current and may have already been acted upon. This is a third-party news feed and may not reflect Fidelity’s views.

Sunday newspaper round-up: Globalisation, Bank of England, Next

(Sharecast News) - The Bank of England has blamed, not without reason, Vladimir Putin's murderous invasion of Ukraine and the attendant energy price shock for much of the current spike in prices. Yet any chief executive worthy of the job should be preparing against the risk of another shock, that brought on from Western disengagement from China. The price stability of the last 30 years was in large measure the result of the disinflation resulting from technology and globalisation. The West in effect traded its economic resilience for cheap prices and the supposed efficiencies of 'just-in-time' global supply chains. - The Sunday Telegraph What has changed in the British economy, aside from Putin's gas escalation, which acts as a deflationary tax on the economy, that might justify the Bank of England tossing its forward guidance out the window and pursuing a punishing monetary policy? Nothing. Wages are quiescent, global commodity prices retreating, money supply growth has collapsed, 10-year Gilt yields are down by 45 basis points, the yield curve has inverted and the International Monetary Fund has slashed its global forecasts. What Bank should be doing is to let inflation drift down in the least disruptive fashion. "The wisest path, Governor, is to speak little and do even less." - Sunday Telegraph

Fashion retailer Next is studying taking out a stake in clothing and lifestyle outfit Joules. Against the backdrop of a 76% drop in the latter's share price year-to-date, Next has been engaging in talks for several weeks to buy a 25% stake in its smaller rival. Sky News reported however that a final deal was some time away and might not even materialise. The structure of any deal was unclear although, at Joules's current valuation, Next would likely pay approximately £10m. - Financial Mail on Sunday

BP is on track to pay a lower tax rate during the current year than before Covid-19 hit, notwithstanding the government's windfall tax on energy companies' profits. Its tax rate is set to fall to 35%, down from 36% in 2019 and 38% in 2017 and 2018, thanks to a much stronger refining market and exceptional trading results. However, the company said that this year's rate would be consistent with the average of 36% since 2017. - The Sunday Telegraph

Fraser, owned by Sports Direct founder Mike Ashley, is pursuing a claim against investment bank Morgan Stanley, alleging that it acted in 'bad faith' over trades he made to build up his stake in fashion giant Hugo Boss which now has a value of £770m. Morgan Stanley, it is claimed, tried to harm Frasers by indirectly forcing the company to transfer Hugo Boss stock options. Imposition of the margin call might have led to "significant commercial and reputational damage" for Frasers, as well as "unwarranted speculation" regarding its financial health. - Financial Mail on Sunday

Share this article

Related Sharecast Articles

Monday newspaper round-up: Renewable energy, BlackRock, Frasers Group
(Sharecast News) - A development company that sells off land no longer needed by Thames Water has paid out a £14m dividend despite warnings that it could become engulfed by the water group's financial woes. Accounts filed at Companies House show Kennet Properties paid out a £14.5m dividend in the year to 31 March 2023 despite the difficulties faced by the wider group, which is facing going into administration. - Guardian
Sunday share tips: Mitie, Costain
(Sharecast News) - The Financial Mail on Sunday's Midas column tipped shares of Mitie to its readers, highlighting it shift from facilities management to facilities transformation.
Sunday newspaper round-up: IDS, Ocado, Foxtons
(Sharecast News) - Asset manager Redwheel told regulators they should reduce the UK postal service's legal obligations. The move followed a failed buyout attempt by Daniel Kretinsky for International Distributions Services, its parent company. The billionaire investor was said to be evaluating a possible improved bid. The company meanwhile has petitioned Ofcom to let it cut the number of days per week during which it must deliver second-class mail from six to two or three. That would save the company £300m and see it shrink its workforce by 1,000. According to Redwheel, as first reported by the Sunday Times, the enforced costs of its legal obligations left the company "vulnerable to corporate predators". - Guardian
Friday newspaper round-up: Thames Water, Netflix, consumer confidence
(Sharecast News) - "Misleading" and "inconsistent" labels make it hard for shoppers to know where their food comes from, the consumer champion Which? has said, as it found supermarket chains were selling products with "meaningless" statements on their packaging. Retailers must supply the "country of origin" for specific foods including fresh fruit and vegetables, unprocessed meats, fish, wine and olive oil but the rules do not generally apply to processed meat or frozen or processed fruit and vegetables. - Guardian

Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.

Award-winning online share dealing

Search, compare and select from thousands of shares.

Expert insights into investing your money

Our team of experts explore the world of share dealing.