Gym leggings in and pork pies out as ONS updates inflation basket
Wearable action cameras and “athleisure” wear have been added to the UK’s official measure of consumer prices this year, and pork pies and pasties dropped, as the inflation basket was updated to reflect changing consumer tastes and “something of a health and activity theme”, writes Naomi Rovnick
The representative shopping basket is used by the Office for National Statistics to measure how much Britons spend on goods and services. Each year it adds and removes items to track changes in consumer tastes.
The competitive nature of the market for strap-on and handheld action cameras, such as GoPros, saw the company’s own sales fall 38 per cent in the fourth quarter last year. But the global market for wearable technology, including cameras, is forecast to grow to 245m units in 2019, according to CCS Insight, the research company — almost triple the number sold in 2015.
Insurers pose risk to pension reform, body warns
Sweeping reforms of UK pensions are in “great danger” of being derailed because insurance companies are withdrawing cover for financial advisers providing advice on retirement arrangements, according to a trade body.
The Personal Finance Society, the professional body for independent financial advisers, said many of its 37,000 members are finding it difficult to secure the insurance needed to offer pension transfer advice.
This comes as the Financial Conduct Authority, the UK financial regulator, steps up a probe into poor transfer advice, amid concerns about a new pension mis-selling scandal.
Reforms introduced by George Osborne, the former chancellor, in 2015 made it more attractive for people to transfer cash out of generous defined benefit pension schemes run by companies that guaranteed an income in retirement.
FCA calls on banks to reform company culture
The UK’s financial regulator has called for banks and other financial services companies to reform their institutions in a report that blames bad culture, rather than individuals, for conduct failings since the financial crisis, writes Nicholas Megaw.
The Financial Conduct Authority published the discussion paper, “Transforming Culture in Financial Services”, on Monday, a day after its chief executive, Andrew Bailey, described the revelations of misconduct at the Presidents Club charity dinner as a “wake-up call” for the City of London.
Jonathan Davidson, FCA executive director of supervision for retail and authorisations, wrote that “culture in financial services is widely accepted as a root cause of the major conduct failings that have occurred within the industry in recent history, causing harm to both consumers and markets”.
The FCA wants to ask “provocative questions” to encourage change in companies and prevent a repeat of scandals such as PPI mis-selling, or allegations of mistreatment at Royal Bank of Scotland’s old restructuring unit.
Mr Davidson pointed to Wells Fargo’s bogus-accounts scandal in the US, saying such incidents had “raised questions of trust in firms and in the industry as a whole”.
Treasury looks to sell £7.4bn Help to Buy loan book
The UK government is in talks with large investors to sell its £7.4bn Help to Buy loan book, ahead of receiving its first fees from borrowers in April, write Aime Williams and Jim Pickard.
Under its flagship Help to Buy equity loan scheme, the government has offered borrowers an equity loan of up to 20 per cent of the value of a newly built home, or 40 per cent in London.
The loans are interest-free for five years but after that borrowers must begin to pay a fee of 1.75 per cent of the value of their loan, increasing each year by RPI plus 1 per cent.
Government officials began exploring whether investors would be interested in buying the loan book in November, according to one person familiar with the matter. They have discussed the potential sale with major asset managers.
The Treasury said it would not offer a “running commentary” on the sales process.
About 145,000 properties had been bought using the Help to Buy loan scheme as of September last year, according to official statistics, with the collective value of the loans standing at £7.4bn. The combined value of the properties bought using the loans is £35bn, according to the Treasury.