This weeks news includes; Bitcoin splits in two, Addison Lee loses gig economy law suit against worker, RBS posts profits of nearly £1 billion, Apple profits rise.
Below are our top 10 stories that you need to know about. Be sure to check our twitter page and Facebook page for regular posts of important headlines. Click on the links for full stories. Get all the important stories and insights straight into your inbox by subscribing to our mailing list here.
Opinion articles of the week:
- Bloomberg claims that Plans to Rethink America’s Malls Can’t Keep Up With Retail’s Collapse.
- LawCareers.net and Travers Smith look at how the gig economy impacting employment status.
- Sky News looks at Ryan Air’s boss’ view on how Brexit will affect the airline industry.
- Investopedia looks at the The 5 Biggest Risks Facing the Markets
1. BITCOIN PLATFORM SPLITS
Bitcoin has split in two after a dispute within the community between developers and Bitcoin miners. Miners, who create the cryptocurrency by solving mathematical equations, began using new software which created a new currency: Bitcoin cash. Bitcoin cash will allow much larger transactions to be processed on the network, raising it from 1 MB (Megabyte) of data per 10 minutes to 8 MB.
There have been no major issues since the split but it is taking time to be adopted. Bitcoin traded 2.76% lower at $2726.09. Despite this however, Bitcoin’s price has risen exponentially, in 2010 on Bitcoin was only $0.07.
For more on the split and the differences between Bitcoin cash and Bitcoin read BBC News’ report.
Read the Economist’s report for more analysis.
To find out what Bitcoin issue and how it works read our insight article.
2. ADDISON LEE LOSES GIG ECONOMY LAW SUIT
Addison Lee has failed to argue that one of its workers was an independent contractor in a UK Employment Tribunal. A former worker for the taxi and courier company brought forward an £800 claim for unpaid holiday leave. Addison Lee argued that he was an independent contract, not an employee, so therefore was not entitled to this.
The tribunal felt that the relationship between Addison Lee and the worker was more of an employment relationship and so should be entitled to benefits such as holiday pay and minimum wage. He was a courier and worked on a short term contractual basis but Addison Lee was not his “client or customer”, it was more like his employer.
Gig economy workers are generally placed on more flexible contracts but are granted minimal employment rights or protections. The law is only now catching up and accurately classifying workers to give them their legal rights. Similar results have appeared in a number of gig economy law suits but every contract is different so we will see many more cases like this in the coming months and years.
City A.M reports here.
3. DISCOVERY BUYS SCRIPPS FOR $14.6 BILLION
Discovery Communications is acquiring Scripps Network for $14.6 billion. This deal will help the combined company’s position with pay TV operators to cope better with changing viewing trends.
Scripps’ primarily has a female audience of lifestyle channels including HGTV, Travel Channel and Food Network. This contrasts, Discovery’s male dominated viewership on its channels such as Animal Planet and Discovery Channel. The deal will help discovery tap into the female audiences and allow them to cut costs.
The acquisition will help their position when the combined company attempts to forge deal with pay TV operators and agreed package bundles with third parties. Scripps shares were up by 30% on the announcement of the deal while Discovery’s shares were up by 3.
Business Insider looks further at the deal.
4. BANK OF ENGLAND LOWERS UK GROWTH FORECAST
The Bank of England voted to hold interest rates at the record low of 0.25% and warned that the uncertainty surrounding Brexit will harm the UK economy. The Bank of England reduced growth forecasts by 0.2% down to 1.7% for 2017. This is partly due to a forecasted decline in business investment due to uncertainty about the nature of the Brexit deal. Markets react negatively to news, the pound fell by 0.76% against the euro to a nine-month low.
To find out more about governor Mark Carney’s comment and how the Bank of England views, read BBC News’ analysis.
5. RBS RETURNS TO PROFIT
Finally making a recover from turbulent times, The Royal Bank of Scotland posted a profit of £939 million for the first half of 2017. This is a stark contrast to the £2 billion loss it suffered in the first half of 2016. The government still owns 73% of RBS and stronger profits are likely to boost the share price, reducing the losses that will be incurred on the sale of its shares in the troubled bank.
This profit came as good news however its recent £3.65 billion pay out to the US Federal Housing Finance Agency over the selling of risky mortgage backed securities is likely to send RBS into an overall loss for 2017. RBS are also expected to make a separate settlement with the Department of Justice later in the year which will almost certainly send it in to the red.
This year will be the 10th year of losses in a row for RBS. BBC News looks further at the figures.
The Guardian looks at the credit crunch 10 years on from when it began and how it changed our lives.
6. TESLA REVENUE UP BUT LOSSES RISE TOO
Tesla’s quarterly revenues doubled but losses were up by around 15% as well. Revenue went up to £2.1 billion, helped by increased sales of its high end model cars. It now plans to introduce its most affordable electric car, priced at $35,000, to help it break into the mainstream market.
Losses however increased from $293 million to $336 million but this was primarily due to increased costs for research, development and other costs. Despite this increase in losses share prices rose 7%.
To find out more about Tesla and their plans for solar energy and space travel read BBC News’ analysis.
7. DEUTSCHE BANK GIVES 25 YEAR COMMITMENT TO UK BASE
Deutsche Bank has announced that a 25 year commitment for its new London headquarters. The new offices will be in Moorgate and will host 5000 employees once development is completed in 2023. Deutsche Bank currently employs over 8500 people in the UK.
This marks a vote of confidence in the UK post –Brexit. Many other of its banking counterparts such as Goldman Sachs, Credit Suisse and Citi Group have announced their plans to move operations out of the UK.
The Telegraph looks further at this.
8. APPLE PROFITS RISE
Apple’s profits for the past three months were up by 12% to £6.6 billion. This rise was mainly attributed to sales increases in Apple Pay, Apple Pay and the App Store. Revenues are up by 7% to a staggering $45.4 billion. iPhone sales accounted for $24.8 billion and a new iPhone is set to be released next month. In China however, revenues fell by 9.5% compared to the same time year, as the iPhone struggles to compete with a number of local Chinese competitors.
Share prices went up by 5% in response to the news. Read BBC News’ analysis for more information.
9. B&M BARGAINS ACQUIRE HERON FOODS FOR £152m
Discount supermarket B&M Bargains has announced that it will acquire Heron Foods convenience stores for £152 million. The deal will see B&M takeover Heron Food’s 251 UK stores. Heron has around 3,800 employees and made a pre-tax profit of £8.6 million last year.
Many supermarkets are now attempting to boost their presence in the convenience store market through mergers and acquisitions. Sainsbury’s recently bought Nisa Local, Tesco bought Booker and Morrisions agreed a supply deal with McColls. B&M hopes to offer discount goods at convenience stores and this deal was deemed a “no brainer”. B&M is also looking to double its number of stores in the UK over the company and this acquisition marks a big step towards achieving this objective.
Read the Telegraph’s report for more.
10. BRITISH GAS RAISES PRICES BY 12.5%
Centrica, the owner of British Gas, has announced that it will be raising prices by 12.5% from 15 September 2017. The controversial decision which will affect 3 million customers will see the average annual duel fuel bill rise by £76 to £1120.
This is British Gas’ first rise in electricity prices since 2013. The rise will not affect pre-payment meter customers. Sky News looks further at this issue.