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Business Mayor
08-05-2025
- Business
- Business Mayor
UK regulator to dilute mortgage lending rules
Stay informed with free updates Simply sign up to the UK financial regulation myFT Digest — delivered directly to your inbox. The UK financial watchdog has announced plans to water down its rules on mortgage lending to make it faster and cheaper for people to get home loans, despite consumer groups warning of increased mis-selling risks. British lenders will be freed from having to provide formal advice or to carry out full affordability assessments when arranging mortgages for many customers, under plans outlined by the Financial Conduct Authority on Wednesday. 'We want to make it easier, faster and cheaper for borrowers to make changes to their mortgage,' Emad Aladhal, the FCA's director of retail banking, said in a speech. The regulator said it would also scrap guidelines for lenders on dealing with interest-only mortgages and on telling customers what support is available when interest rates rise. It said these had achieved their aims and were not providing much benefit. The plans, which will chip away at rules designed to prevent a future financial crisis, are part of the FCA's response to prime minister Sir Keir Starmer's call for regulators to focus on promoting economic growth. 'These proposals can allow lenders greater scope to innovate and develop their own approaches to deliver good outcomes, and in doing so empower borrowers to make the right choices for their mortgage,' said Aladhal. Banks welcomed the announcement. 'The proposals should prove beneficial for those looking to remortgage or reduce their mortgage term,' said Charles Roe, director of mortgages at the UK Finance trade body. 'The changes will help drive the government's growth agenda in a way that benefits our members, and their mortgage customers.' However, there are fears the regulator is diluting consumer protections. 'The FCA will need to watch the market very carefully after these rules come into force to ensure they don't drive a return to the era of mis-selling or catalyse a new era of mis-buying,' said James Daley, head of consumer group Fairer Finance. Under the proposals, lenders would be allowed to do a lighter affordability assessment of a customer when offering to remortgage at a cheaper rate than their existing lender. Last year, 83 per cent of people who remortgaged stayed with their existing lender and the FCA said this reflected 'several barriers or transaction costs, both in time and money' when seeking a mortgage from a different provider. Lenders would be freed from having to conduct a full affordability assessment when customers are reducing the term of their mortgage. The FCA said 41 per cent of new mortgages last year extended beyond the state pension age of 67 and reducing the term would lower the risk of repayment problems 'later in life'. The regulator said it also aimed to make it easier for customers to arrange a mortgage without having to go through the formal process of receiving regulated advice, which includes the lender checking if a home loan is suitable. Recommended In the past two decades, 97 per cent of customers getting a new mortgage have received regulated advice from their lender. That is up from about 70 per cent before the FCA introduced stricter requirements in 2014 in response to the 2008 financial crisis. The FCA said its 2014 rule had restricted 'more than intended' the ability of consumers to opt out of advice when they knew the precise home loan they wanted and were confident of not needing the extra protection of having the suitability assessed. Its rules would not change for higher risk customers, such as those consolidating debt, exercising a statutory 'right to buy' their home, with shared equity arrangements or on lifetime mortgages. The regulator said it was able to dilute some requirements since introducing consumer duty rules two years ago that require firms to ensure customers get good outcomes. But it said there was a risk its proposals could mean people are 'more likely to choose an unsuitable or more expensive product'. Companies have until June 4 to respond to the consultation.
Yahoo
08-05-2025
- Business
- Yahoo
Lenders in mortgage price war ahead of Bank of England interest rate decision
Almost all major lenders are now offering under-4% deals this week, giving some respite for borrowers amid a mini price war among mortgage providers ahead of the Bank of England's interest rate decision. The average rate for a two-year fixed mortgage stands at 4.99%, lower than last week's 5.06%, while five-year fixed deals average 5.24%, below last week's 5.31%, according to data from Uswitch. The Bank of England (BoE) held its interest rate at 4.5% in March but is expected to reduce borrowing costs down to 4.25% later this Thursday. The primary inflation measure, the Consumer Price Index (CPI), stood at 2.6% in the 12 months to March 2025, a slight decrease from the previous month. That means that prices have been rising at the slowest pace since December and are closer to the BoE's 2% target. This week, Nationwide (NBS.L) has cut rates by up to 0.3 percentage points, and its new rates include a 3.84% deal for homebuyers with a 40%. Halifax has also announced it will be reducing rates by up to 0.18 percentage points while and TSB and Virgin Money are lowering deals by up to 0.2 percentage points. Read more: UK house prices rise for the first time since January The UK financial watchdog has announced plans to water down its rules on mortgage lending to make it faster and cheaper for people to get home loans. UK lenders will be freed from having to provide formal advice or to carry out full affordability assessments when arranging mortgages for many customers, under plans outlined by the Financial Conduct Authority (FCA). 'We want to make it easier, faster and cheaper for borrowers to make changes to their mortgage,' Emad Aladhal, the FCA's director of retail banking, said in a speech. Skipton Building Society has launched its Delayed Start Mortgage, which allows new homeowners to postpone repayments for the initial three months, providing "breathing space" to manage the additional expenses that come with purchasing a home. HSBC (HSBA.L) has a 3.93% rate for a five-year deal, unchanged from the previous week. For those with a Premier Standard account with the lender, this rate is 3.90%. Looking at the two-year options, the lowest rate is 3.91% with a £999 fee, also unchanged. Both cases assume a 60% loan-to-value (LTV) mortgage, meaning buyers need to have at least 40% for a deposit. HSBC offers 95% LTV deals, meaning you only need to save for a 5% deposit. However, the rates are much higher, with a two-year fix coming in at 4.99% or 4.94% for a five-year fix. This is because their financial situation and deposit size determine the rate someone can get. The larger the deposit, the lower the LTV, allowing buyers to access better deals because lenders consider them less risky. NatWest (NWG.L) has a five-year deal coming in at 3.88% with a £1,495 fee. No changes from last week. The cheapest two-year fix deal is 3.88%, again untouched from the previous week. In both cases, you'll need at least a 40% deposit to qualify for the rates. At Santander (BNC.L), a five-year fix is 4.10% for first-time buyers, lower than the previous 4.16%. It has a £999 fee, assuming a 40% deposit. For a two-year deal, customers can also secure a 3.94% offer, with the same £999 fee, which is also lower than the previous 4.01%. Read more: UK taxes may need to rise in autumn, Rachel Reeves warned Santander has also introduced mortgage products tailored to first-time buyers with large loans. These feature two- and five-year fixed-rate deals at 60% LTV, albeit with a higher £1,999 product fee. Barclays (BARC.L) was the first among major lenders to bring back under-4% deals, with a five-year fix at the lender at 3.93%. For "premier" clients, this rate drops to 3.92%. The lowest you can get for two-year mortgage deals is 3.92%. Barclays has launched a mortgage proposition to help new and existing customers access larger loans when purchasing a home. The initiative, known as Mortgage Boost, enables family members or friends to effectively "boost" the amount that can be borrowed toward a property without needing to lend or gift money directly or provide a larger deposit. Under the scheme, a borrower's eligibility for a mortgage can increase significantly by including a family member or friend on the application. For example, an individual with a £37,500 annual income and a £30,000 deposit might traditionally be able to borrow up to £168,375, enabling them to purchase a home priced at around £198,375. However, with Mortgage Boost, the total borrowing potential can rise substantially if a second person — such as a parent — joins the application. In this case, if the second applicant also earns £37,500 a year, the combined income could push the borrowing limit to £270,000, enabling the buyer to afford a home worth up to £300,000. Nationwide's (NBS.L) lowest mortgage rate now stands at 3.84%, which is available to existing and new customers who are looking to move to a new home. This rate is available on both the two-year and five-year fixed rate products. For the first time since September 2024, Nationwide will be offering sub-4% rates for first-time buyers. The lowest first-time buyer rate is 3.94% and available on a two-year fixed rate product at 60% loan-to-value (LTV) with a £1,499 fee. First-time buyers can also get 3.99% on the same 60% LTV, two-year fixed rate product but with a lower £999 fee. Read more: Most popular and affordable towns for UK families revealed Carlo Pileggi, Nationwide's senior manager, mortgages, said: 'We're pleased to be able to make our third rate cut in three weeks as we strive to remain one of the most competitive lenders in the market. This latest round of changes includes us offering sub-four percent rates for first-time buyers, as well as reducing rates across our Helping Hand mortgages, which enable eligible first-time buyers to borrow up to six times their income up to 95% loan-to-value.' The lender has announced it is changing the eligibility criteria for its mortgage scheme, which allows people to borrow up to six times their income. The minimum income required to take out a Helping Hand mortgage has been reduced to £35,000 — meaning more people will be eligible for the scheme. The minimum income requirement for joint applications will remain at £55,000. Helping Hand mortgages enable people to borrow up to six times their income, meaning potential homeowners can borrow 33% more compared to Nationwide's standard lending at 4.5 times income. Halifax, the UK's biggest mortgage lender, offers a five-year rate of 3.93% (also 60% LTV), lower than the previous 4.1%. The lender, owned by Lloyds (LLOY.L), offers a two-year fixed rate deal at 3.87%, with a £999 fee for first-time buyers, which is also lower than last week's 3.94%. It also offers a 10-year deal with a mortgage rate of 4.78%. Read more: UK house sales fall as stamp duty break hits demand The lender has enhanced its five-year fixed mortgage products by increasing borrowing capacity. This improvement allows borrowers to access up to £38,000 more, enabling them to secure larger mortgages based on individual incomes. Rachel Springall, finance expert at Moneyfacts, said: "The flourishing choice of low-deposit mortgages will no doubt be welcomed by borrowers who are either looking to remortgage or are a first-time buyer. "The government has been clear that it wants lenders to do more to boost UK growth, and so a rise in product availability for aspiring homeowners is a healthy step in the right direction." Amid this mini price war between mortgage providers,, prospective homeowners have some better options. NatWest's (NWG.L) 3.88% is currently the cheapest deal for five-year fixes, while Halifax's 3.87% comes out on top for two-year fixes among the top banks, though both require a 40% deposit. The average UK house price is £297,781, so a 40% deposit equates to about £120,000. A growing number of homeowners in the UK are opting for 35-year or longer mortgage terms, with a significant rise in older borrowers stretching their repayment periods well into their 70s. Read more: 8 intriguing homes with links to World War Two Lender April Mortgages offers buyers the chance to borrow up to six times their income on loans fixed for five to 15 years, from a deposit of 5%. Both buying alone and those buying with others can apply for the mortgage. As part of the independent Dutch asset manager DMFCO, the company offers interest rates starting at 5.20% and an application fee of £195. Skipton Building Society has also said it would allow first-time buyers to borrow up to 5.5 times their income to help more borrowers get on the housing ladder. Leeds Building Society is increasing the maximum amount that first-time buyers can potentially borrow as a multiple of their earnings with the launch of a new mortgage range. Aspiring homeowners with a minimum household income of £40,000 may now be able to borrow up to 5.5 times their earnings. Mortgage holders and borrowers have faced record-high repayments in recent years, as the Bank of England's base rate has been passed on by banks and building societies. According to UK Finance, 1.3 million fixed mortgage deals are set to end in 2025. Many homeowners will hope the Bank of England acts quickly to cut rates more aggressively. At the same time, savers will likely root for rates to remain at or near their current levels. Read more: Home renovation mistakes and how to avoid them How higher house prices are impacting young people's finances 10 home upgrades that don't need planning permission
Business Mayor
07-05-2025
- Business
- Business Mayor
UK and eurozone construction declines slow; European markets fall ahead of Fed rate decision
Show key events only Please turn on JavaScript to use this feature Barclays' annual meeting today attracted fresh protests from activists opposed to its alleged provision of financial services to Israeli defence firms, forcing the lender to increase security checks on attendees in a bid to reduce disruption seen in previous years. Dozens of protesters gathered outside the event in Westminster, central London, waving Palestine flags and holding banners that accused Barclays of 'arming Israel' and 'banking on genocide'. Reuters saw at least one protester physically ejected from the building shortly before the event was due to begin. The activist was heard to shout 'Free Palestine' as he was escorted out by security. Security staff remove a pro-Palestinian demonstrator from the Barclays annual general meeting at QEII Center in London. The protest was organized by the Palestine Solidarity Campaign, demanding Barclays Bank to stop providing financial services to defence companies supplying the Israeli government. Photograph: Tolga Akmen/EPA As well as bombing Gaza incessantly, the Israeli government has blocked aid and the territory is on the brink of catastrophe after two months of a total blockade by Israel, aid workers say. Share Britain's financial watchdog plans to simplify mortgage rules, and has launched a consultation. The Financial Conduct Authority said: We want to make it easier, faster and cheaper for borrowers to make changes to their mortgage. Doing so will help consumers better navigate their financial lives and support growth, both priorities in our new strategy. This includes making it quicker and easier for consumers to discuss options with a firm, while still having access to advice if they want or need it easier for consumers to reduce their mortgage term, lowering the total cost of borrowing and reducing the risk of repaying into later life easier for consumers to access cheaper products when remortgaging The FCA has introduced Consumer Duty – a set of rules to improve consumer protection which it says sets clearer, up-to-date standards in financial services. The watchdog also said it had reminded firms of flexibility in its rules to help people access a mortgage. In June, it will follow this work with a further public discussion on the future of the mortgage market, including risk appetite and responsible risk-taking, alternative affordability testing and product innovation, lending into later life and consumer information needs. Emad Aladhal, director of retail banking said: Our strategy aims to deepen trust and rebalance risk to support growth and improve lives. That's why, with the Consumer Duty now in place to maintain high standards, we want to make it easier, faster and cheaper for borrowers to access and make changes to their mortgage. Share Novo Nordisk's finance chief is sceptical that Donald Trump's executive order to reduce the time it takes to approve pharmaceutical factories in the country will significantly change timelines for the pharma industry. Trump signed an executive order on Monday that aims to reduce the time it takes to approve pharma plants in the United States, as part of new regulations to encourage international drugmakers to shift their operations to the country. Wegovy and Ozempic maker Novo Nordisk's chief financial officer Karsten Munk Knudsen told Reuters that it takes years for a pharmaceutical company to build a factory in compliance with the quality protocols set and enforced by the US Food and Drug Administration (FDA). We would welcome if there are more pragmatic ways through it, but I'm sceptical that it will markedly change timelines in our industry. The trade group PhRMA estimates it takes five to 10 years to build a new pharmaceutical plant in the US. Share Updated at 12.56 CEST Amazon said it has made a 'fundamental leap forward in robotics' after developing a robot with a sense of touch that will be capable of grabbing about three-quarters of the items in its vast warehouses. Vulcan – which launches at the US firm's 'Delivering the Future' event in Dortmund, Germany, on Wednesday and is to be deployed around the world in the next few years – is designed to help humans sort items for storage and then prepare them for delivery as the latest in a suite of robots which have an ever-growing role in the online retailer's extensive operation. Aaron Parness, Amazon's director of robotics, described Vulcan as a fundamental leap forward in robotics. It's not just seeing the world, it's feeling it, enabling capabilities that were impossible for Amazon robots until now. Amazon's Project Vulcan, the new robot which has 'force feedback sensors' on the end of an arm and grabbing tool. Photograph: Amazon/PA The robots will be able to identify objects by touch using AI to work out what they can and can't handle and figuring out how best to pick them up. They will work alongside humans who now stash and retrieve items from shelving units which are manoeuvred to them at picking stations by wheeled robots – of which Amazon now has more than 750,000 in operation. Vulcan will be able to stow items on the upper and lower levels of the shelving units – known as pods – so that humans no longer need to use ladders or bend so often during their work. Robots now operating in Amazon's warehouse are able to shift items around or pick items using suction cups and computer vision. Share Turning to corporate news again… One of the UK's largest planned offshore windfarms has been cancelled by its developer, the Danish wind power company Ørsted, as a result of higher costs and greater risk. The fourth phase of the huge Hornsea windfarm development, located off the Yorkshire coast, was expected to include 180 giant turbines, capable of generating the equivalent of enough green electricity to power 1m homes. However, Ørsted's chief executive, Rasmus Errboe, said in a statement to investors it was discontinuing the development: 'The combination of increased supply chain costs, higher interest rates, and increased execution risk have deteriorated the expected value creation of the project.' As a result, the company expects to incur breakaway costs of between 3.5bn and 4.5bn Danish kroner (£399m-£513m). A support vessel is seen next to a wind turbine at the Walney Extension offshore wind farm operated by Orsted off the coast of Blackpool. Photograph: Phil Noble/Reuters Share Updated at 11.51 CEST Joshua Mahony, analyst at Scope Markets, has looked at the moves in financial markets. European markets have kicked off the day in rather uncertain fashion… This comes as traders weigh up the potential for progress between the US and China, with talks due to get underway in Switzerland [at the weekend]. The response to that news has been surprisingly muted, with the Shanghai composite (up 0.8%) providing the one bright spot as domestic Chinese optimism builds. Nonetheless, coming off the back of a one-month period that has seen sharp gains for the DAX (+17%), IBEX (14%), Eurostoxx (13%), FTSE 100 (11%), and CAC (10%), it comes as no surprise that much of the upside of a resumption in US-China trade talks have been baked in. The DAX remains within touching distance of the all-time high of 23,479. In spite of those US-centric concerns, the German economy remains in a more positive position as the new chancellor Friedrich Merz looks to bring forth a new phase of increased spending and a potential resurgence for German business activity. This morning saw German factory orders jump 3.6% for the month of March, representing the strongest monthly increase since December. This growth in demand came particularly from other euro area nations (8%), while domestic (2%) and rest of the world (2.8%) demand also remained healthy. With Mertz now confirmed as chancellor after a second attempt, the economy looks to be in a more stable position as the government seeks to push forward with a plan to ramp up borrowing and spending in a bid to raise growth. Turning to tonight's Federal Reserve meeting, where interest rates are expected to stay unchanged, he said: Looking ahead, today's FOMC [federal open market committee] meeting undoubtedly provides the main event of note, with traders watching out for commentary from [Fed chair Jerome] Powell over the direction of travel for rates in the face of economic uncertainty. The sheer number of unknowns mean that we are highly unlikely to see the Fed cut rates this time around. However, the events of the past week have also seen markets lose confidence over the potential for a June cut, with a pause going from a 33% outside chance to the 70% base case. Nonetheless, traders still expect to see the bank cut rates another 3-4 times this year, and thus the outlook provided by Powell today will likely help inform markets over the direction of travel for rates. The recent better-than-expected jobs and ISM PMI data does ease the pressure on the Fed to act swiftly, and thus there is a hope that Donald Trump can mend the relationship with China before the economy rolls over. Share Updated at 11.46 CEST Retail sales in the eurozone dipped in March, according to official figures. The volume of sales dipped by 0.1% in both the eurozone and the European Union, according to Eurostat, the statistics office. It also released figures for trade with Ukraine that showed the EU had a €18.3bn trade surplus with the war-torn country last year. In 2024, the EU exported €42.8 billion in goods to Ukraine and imported €24.5 billion, resulting in a €18.3 billion trade surplus.🇺🇦↔️ 📈When compared with 2023, this was an increase in exports and imports of 9.4% and 7.0%, respectively. More info 👉 — EU_Eurostat (@EU_Eurostat) May 7, 2025 Share Matthew Pointon, senior commercial real estate economist at Capital Economics, said: The commercial balance was at its lowest since the height of the Covid lockdowns in May 2020. Early signs of a recovery in construction activity in late 2024 have therefore been snuffed out. Elevated interest rates will be partly responsible, but uncertainty caused by the US tariff announcements may also be weighing on activity. Admittedly, UK property is relatively well insulated from the impact, and some sectors may even benefit. Construction costs may also ease if materials that had been destined for the US are rerouted to the UK. But the rise in overall economic uncertainty may cause some developers to delay plans until the outlook becomes clearer. Indeed, the new orders balance saw a small fall to 44.0, from 44.2 in March. Looking ahead, a gradual fall in interest rates should help construction activity later this year. But until the economic outlook becomes more certain, developers are likely to remain cautious. Share Britain's construction industry remains in a downturn, but the pace of decline slowed last month as housebuilding improved somewhat. Construction activity fell for a fourth month, as rising business uncertainty led to delayed decision-making on new projects. There was a steep reduction in total new work and the pace of decline was the second-fastest since May 2020. The headline construction purchasing managers' index from S&P Global edged up to 46.6 in April from 46.4 in March, signalling the slowest decline in output in three months. Any reading below 50 points to contraction. The latest survey indicated further declines in total order books and cutbacks to staffing numbers. Residential work fell at the slowest pace so far this year, with the index at 47.1. Civil engineering remained the weakest area of construction activity in April (43.1), amid a lack of new work to replace completed projects. Commercial work (45.5) decreased for the fourth month running and the pace of decline accelerated to its fastest since May 2020. Construction companies noted that heightened business uncertainty and worries about the broader UK economic outlook had weighed on client demand. Tim Moore, economics director at S&P Global Market Intelligence, said: UK construction companies have endured a bumpy ride since the start of the year as domestic economic headwinds and hesitancy among clients led to a lack of new work to replace completed contracts. Output levels continued to slide in April, but the rate of decline eased to its slowest for three months. This was helped by slower reductions in residential building work and civil engineering activity. Despite a sharp and accelerated fall in input buying, strong cost pressures persisted in April. Overall input price inflation eased only slightly from March's 26-month peak. Survey respondents commented on rising prices paid for a range of raw materials, as well as efforts by suppliers to pass on greater payroll costs. An encouraging development in April was a slight improvement in business activity expectations for the year ahead. Output growth projections improved to the highest level so far this year, with a number of survey respondents citing the prospect of a turnaround in workloads across the residential building segment. Share Denmark's Novo Nordisk has cut its revenue and profit forecasts for this year following disappointing sales of its weight loss drug Wegovy, as US prescriptions tailed off amid fierce competition. Booming sales of Wegovy and the diabetes medication Ozempic – taken by celebrities such as Oprah Winfrey and Kim Kardashian – helped to turn the pharmaceutical firm into Europe's most valuable listed company, worth $615bn at its peak. However, prescriptions in the United States, its biggest market, have not grown since February, even though Novo Nordisk ramped up production of Wegovy to meet demand. Its market value has halved to about $310bn. This is likely to deepen investor concerns that Denmark's biggest company is losing market share to its US rival Eli Lilly, which makes the diabetes and obesity drugs Mounjaro and Zepbound. Hargreaves Lansdown analyst Susannah Streeter said: Obesity drug maker Novo Nordisk looked like a lean profit machine but its sales are turning flabbier as main rival Eli Lily gains more muscle in the space. Wegovy was the first of a new wave of anti-obesity drugs, known as GLP-1s after the gut hormone they mimic, to hit the market in 2023. Sales of the injectable drug totalled 17.36bn Danish kroner between January and March, down by 13% from the previous quarter. This was below the 18.7bn crowns forecast by analysts. Overall revenues rose by 18% and operating profits advanced by 20% at constant exchange rates in the first quarter, but Novo Nordisk said it was being hit by compounding — medications made by pharmacies using the active ingredients of patented drugs. As a result, Novo Nordisk cut its annual forecasts, ending a four-year run of upgrades. The Danish company now expects 13%-21% sales growth this year, down from the 16%-24% range given at the start of the year. Operating profits are expected to rise by 16%-24%, compared to the previous estimate of 19%-27% growth. Analysts are forecasting that sales and operating profit this year will grow by 17.8% and 21.5%. Chief executive Lars Fruergaard Jørgensen said: In the first quarter of 2025, we delivered 18% sales growth and continued to expand the reach of our innovative GLP-1 treatments. However, we have reduced our full-year outlook due to lower than-planned branded GLP-1 penetration, which is impacted by the rapid expansion of compounding in the US. Novo reported first-quarter profits before interest and taxation of 38.79bn crowns, up 22% from a year earlier. An injection pen of Zepbound, Eli Lilly's weight loss drug, and boxes of Wegovy, made by Novo Nordisk. Photograph: Reuters Derren Nathan, head of equity research at Hargreaves Lansdown, explained: Novo Nordisk has lashed out at the controversial US compounding industry in its quarterly update, citing a focus on preventing unlawful formulations of semaglutide, the active ingredient in its weight-loss wonder jab Wegovy. In some cases US compounding pharmacies are allowed to formulate active medical ingredients into non-approved drugs to meet individual requirements or combat shortfalls in supply. Wegovy sales growth in the US was hardly pedestrian,at 39%, but it was international sales that drove most of the 83% uplift, as new markets open up. None of this was enough to prevent a downgrade to full-year guidance. News earlier in the year that the US drugs reglator FDA has declared the shortage of GLP-1 medicines as over is something of a double-edged sword, he said. There's a clampdown on compounders, but question marks remain over its enforcement. The end of the shortage also raises questions about the health of US demand. That's also reflected in Novo's deal last week with a US healthcare provider to provide Wegovy to patients at a discounted rate of $499. There's intense competition too from Eli Lilly, both in injectables and in the race to bring an oral alternative to the market. These challenges have been reflected in a 40% decline in the share price over the last six months. Novo remains a key player in the biggest shift in healthcare treatment of our generation. This could mark an attractive entry point for opportunistic investors, but there's a real job to do to restore market confidence. Competition is set to heat up further, with other drugmakers developing GLP-1 medications, and cheaper generic versions coming onto the market. Sheena Berry, healthcare analyst at Quilter Cheviot, said: Currently, the obesity market is still dominated by Eli Lilly and Novo Nordisk, but there are numerous clinical trials ongoing with competitors looking to enter the space. Share Updated at 10.39 CEST Phillip Inman Global debt has hit a new record high of more than $324tn, fuelled by extra borrowing by Beijing as the Chinese authorities sought to offset the impact of Donald Trump's tariffs with extra public spending. Debt rose by $7.5tn in the first three months of the year, according to figures from the Institute of International Finance (IIF). A modest increase in economic growth across much of Europe, the US and Asia meant that as a share of economic output, or gross domestic product (GDP), global debt edged down to almost 325%, maintaining a modest annual drop since a borrowing peak in 2021. The IIF, which represents 400 of the largest financial companies from more than 60 countries, said that while major industrialised countries either mainted or reduced debt-to-GDP ratios, emerging markets reached an all-time high of 245% in the first quarter of 2025. China's government debt-to-GDP ratio has surged past 90%, up from 60% in 2019. The IIF said one of the greatest sources of rising debt could be found in Washington, where plans by the White House to reduce taxes without cutting spending could send the US debt-to-GDP ratio above 200%. Bank Of England Governor Andrew Bailey (R) speaks with Institute of International Finance President and CEO Timothy Adams (L) during the Institute of International Finance Global Outlook Forum at the Willard InterContinental Washington on April 23, 2025 in Washington, DC. Photograph:In a hard-hitting judgement on the US president's first 100 days, the usually restrained IIF said: US government debt levels are projected to soar over the next several years and could trigger increased market volatility unless new revenues can be sourced to offset planned tax cuts and extensions.' Tax breaks that are still in place from Trump's first period in office could take the debt to GDP ratio to 180%. Further tax cuts could increase that to beyond 200%. The institute said Trump's pledge to lift overtime income and income from tips out of the income tax regime would cost about $1.4tn over the 10-year budget projection to 2034 – 'implying that the U.S. government would need to borrow an additional $7.2tn over 10 years'. The department of government efficiency (Doge) is currently on track to achieve annual government savings of about $160bn, well below the original $2tn annual target. Share The eurozone construction sector remained in decline in April, while the pace of contraction slowed. New orders fell at a slightly slower rate and many firms cut both jobs and purchasing. Price pressures picked up to a 15-month high, although they remained well below the long-run average. Suppliers' delivery times shortened for the second consecutive month. Companies were also pessimistic about the year ahead, with sentiment worsening. The eurozone construction PMI from Hamburg Commercial Bank showed a rise in the headline index to 46 in April from 44.8 in March. Any reading below 50 indicates contraction. Activity has now fallen for three years, though the latest decline was the least pronounced since February 2023. The slower decline largely reflected a softer reduction in Germany, while the contraction in France worsened slightly. Meanwhile, activity in Italy broadly stalled over the month. Norman Liebke, economist at Hamburg Commercial Bank, said: HCOB Economics expects further interest rate cuts by the ECB in the coming months of this year, which would benefit the construction industry. Residential construction may catch up. Although all three sectors contracted in April, residential construction was able to close the gap with the other two sectors – civil engineering and commercial construction. Since the beginning of 2023, residential construction has performed significantly worse. The outlook remains bleak. Orders are falling rapidly and are well below the historical average. Business expectations have declined further, with no signs of improvement in the near future, particularly given the increased geopolitical uncertainties. In view of this difficult situation, construction companies continued to cut jobs in April. Cranes at a building and construction site near the TV tower in Berlin, Germany, 30 April 2025. Photograph: Hannibal Hanschke/EPA Share European stock markets dipped at the open, ahead of the Federal Reserve's meeting later today. The FTSE 100 index in London has lost 18 points, or 0.2%, to 8,578, after its recent record run. The Footsie rose for 16 trading sessions in a row. Germany's Dax and Italy's FTSE MiB are flat to slightly lower while France's CAC has dropped by 0.5%. Traders are waiting nervously for the Fed's rate decision and Fed chair Jerome Powell's press conference. Naeem Aslam, chief investment officer at Zaye Capital Markets, said The anticipation surrounding the Federal Reserve's policy decision is causing investors to tread carefully. While no rate change is expected, market participants are keenly awaiting Chair Jerome Powell's remarks for insights into future monetary policy directions, especially in light of recent strong labor data and persistent inflation concerns. Share In Germany, factory orders jumped more than expected in March, in the run-up to Donald Trump's trade tariff announcements. Orders rose by 3.6% between February and March, according to the federal statistics office, beating analysts' expectations of a 1.3% increase. Stripping out major orders, demand was up by 3.2%. Orders rose across electrical and transport equipment, machinery, automotives and pharmaceuticals. Business surveys from S&P Global also suggest that Germany's factories emerged from a downturn in April, helped by export orders. However, Trump's tariffs against the EU – announced on 2 April, but then paused – have clouded the outlook for Europe's biggest economy. Economists are wondering whether the improvement in performance was due to companies trying to get ahead of the levies. Goldman Sachs analysts said last week that such frontloading may have added 15% to eurozone exports to the US between January and April. Michael Herzum, head of macro and strategy at Union Investment, said, according to Bloomberg News: Don't read too much into this month's increase. Unfortunately the recovery so far is nothing more than a flash in the pan. Unpredictable US economic policy will continue to be a burden for the time being and stands in the way of dynamic growth in 2025. Share Updated at 09.25 CEST Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy. China has cut interest rates, and news of trade talks between Beijing and Washington lifted Asian stocks. The People's Bank of China is making a half-point cut to the banks' reserve requirement ratio, its benchmark interest rate, and trimming other interest rates, releasing 1tn yuan into the banking system. Pan Gongsheng, governor of the People's Bank of China, said the move was due to 'uncertainties of global economy, economic fragmentation and trade tensions, which disrupted global industrial supply chains'. Beijing announced the measures amid a damaging trade war with the US. After weeks of rumours over de-escalation between the two countries, markets gave a lukewarm welcome to news that top trade officials are due to meet in Geneva this weekend – the first meeting since Donald Trump launched punitive tariffs against China. China's vice-premier He Lifeng will meet US treasury secretary Scott Bessent on the sidelines of meetings in Switzerland between 9 and 12 May. US trade representative Jamieson Greer will also attend. Japan's Nikkei edged 0.1% lower, while Hong Kong's Hang Seng rose by almost 0.5% and markets in Taiwan, Australia and South Korea were up between 0.1% and 0.55%. In mainland China, the Shanghai Composite rose by nearly 0.5% while the Shenzhen Composite gained 0.16%. Stephen Innes, managing partner at SPI Asset Management, said: That tepid market response speaks volumes. Because let's be honest—this isn't a rates problem, it's a demand problem. China's real economy isn't thirsty for credit, it's paralyzed by weak confidence, property rot, and collapsing export flows. You can lead the horse to water, but you can't make it drink—especially when the water's tainted with deflationary fear and policy fatigue. European stock markets are set for a mixed open, with the UK's FTSE 100 index seen opening slightly lower after its recent strong run while the German and French indices are expected to rise. Traders are cautious ahead of the US Federal Reserve's meeting tonight, where interest rates are expected to be left unchanged. Oil prices are rising again, after yesterday's 4% jump amid signs of higher demand in Europe and China, lower production in the US, tensions in the Middle East, a day after prices fell to a four-year low. Brent crude is 1.1% ahead at $62.86 a barrel while US crude has risen by 1.3% to $59.86 a barrel. The Agenda 8.30am BST: Eurozone HCOB Construction PMI for April 9.30am BST: UK S&P Global Construction PMI for April 10am BST: Eurozone retail sales for March 7pm BST: US Federal Reserve interest rate decision Share Updated at 09.07 CEST READ SOURCE
Yahoo
07-05-2025
- Business
- Yahoo
UK's FCA opens consultation to simplify mortgage rules
The Financial Conduct Authority (FCA) as launched a consultation aimed at simplifying the rules governing the UK mortgage market. According to the regulator, the initiative is intended to make it easier, faster and more cost-effective for consumers to adjust their mortgage arrangements. The FCA noted the proposed changes form part of its broader strategy to help consumers better navigate their financial circumstances and support economic growth. The consultation is focused on giving consumers more flexibility and choice, while maintaining access to advice when needed. According to the regulator, the new proposals would make it quicker and easier for borrowers to explore their options with mortgage providers. This includes simplifying the process for reducing mortgage terms—potentially lowering the total cost of borrowing and mitigating the risk of repayments extending into later life. The measures would also facilitate access to cheaper products when remortgaging. The FCA said it has worked over the past decade to raise conduct standards and improve culture among mortgage lenders. With the introduction of the Consumer Duty, which sets clearer and more current expectations for firms, the FCA aims to eliminate outdated guidance and create space for further innovation. The watchdog noted that it has already reminded firms about existing flexibility within its rules to support consumer access to mortgages. A broader public discussion on the future of the mortgage market is expected to follow in June. This will examine issues such as risk appetite, affordability testing, lending into later life, and the information needs of consumers. FCA retail banking director said Emad Aladhal: 'Our strategy aims to deepen trust and rebalance risk to support growth and improve lives.' 'That's why, with the Consumer Duty now in place to maintain high standards, we want to make it easier, faster and cheaper for borrowers to access and make changes to their mortgage.' Last month, the FCA began seeking feedback from firms on its upcoming live AI testing service, set to launch in September 2025, to help businesses implement AI in a safe and responsible manner. "UK's FCA opens consultation to simplify mortgage rules " was originally created and published by Retail Banker International, a GlobalData owned brand.
Finextra
07-05-2025
- Business
- Finextra
FCA consults on steps to simplify mortgage rules
We want to make it easier, faster and cheaper for borrowers to make changes to their mortgage. 0 Doing so will help consumers better navigate their financial lives and support growth, both priorities in our new strategy. Our consultation supports greater choice for consumers, making it: quicker and easier for consumers to discuss options with a firm, while still having access to advice if they want or need it easier for consumers to reduce their mortgage term, lowering the total cost of borrowing and reducing the risk of repaying into later life easier for consumers to access cheaper products when remortgaging Over the last decade, we have driven improvements in mortgage lenders' conduct standards and culture. Now with the introduction of the Consumer Duty which sets clearer, up-to-date standards in financial services, we want to remove guidance that's no longer required and provide greater opportunity for innovation. We have already reminded firms of flexibility in our rules to help people access a mortgage. In June, we will follow this work with a further public discussion on the future of the mortgage market. This will include consideration of risk appetite and responsible risk-taking, alternative affordability testing and product innovation, lending into later life and consumer information needs. Emad Aladhal, director of retail banking said: 'Our strategy aims to deepen trust and rebalance risk to support growth and improve lives. 'That's why, with the Consumer Duty now in place to maintain high standards, we want to make it easier, faster and cheaper for borrowers to access and make changes to their mortgage.' This forms part of the work plan set out in our letter to the Prime Minister, where we set out nearly fifty commitments to support growth of the UK economy.
