POLL-AXED!
Business plans have been thrown into chaos by Rishi Sunak’s announcement of a General Election
It's also bad news for Thames Water
BEST laid business plans have been thrown into chaos by Rishi Sunak’s announcement of a General Election.
Officials were expected to start the Government’s sale of shares in Natwest in June.
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But this has now been put on hold by the decision to send Britain to the polls on July 4.
Calling an election triggers a purdah period that restricts government activity in the run-up to the vote.
And July is not possible because of the timing of NatWest’s financial results.
But it could be revived in the autumn.
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It is understood that Shadow Chancellor Rachel Reeves also believes the bank should be in private hands but could opt to just keep selling shares in the market, as has already been done, rather than stage one big event.
The City had been so confident the NatWest share sale was about to kick off that rival bank Barclays placed full-page ads in newspapers yesterday advising people to sign up for alerts and how to invest in shares.
The fate of Thames Water is on even shakier ground as the regulator Ofwat will have to delay its decision from June 12 on whether it can raise bills by 56 per cent.
Thames Water has also put forward a £20billion investment plan to fix its leaky pipes.
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But it cannot raise critical lifeline funds from investors until they know its business plan has approval.
If that is rejected by Ofwat, the alternative is a government-backed form of bankruptcy known as “special administration”.
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As a result, Thames Water could be a big political headache that Labour would inherit should Sir Keir Starmer’s party win the election.
But the City will be spared the endless roadshow of Bank of England officials, such as governor Andrew Bailey, spouting conflicting views on inflation and interest rates.
It has cancelled all public statements but will still make a decision on interest rates on June 20.
GRID TO PYLON £31BN INTO LECCY
NATIONAL GRID is spending £31billion on more pylons and connections after the Ukraine war made home-based electricity all the more important.
The Grid, which transports energy from generators to households and businesses, will double infrastructure investment over five years, partly via a £7bn rights issue.
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Households pay around £22 of their average £1,800 energy bills for energy transmission.
Grid boss John Pettigrew said that while the transmission charge may go up, overall bills should come down with cheaper electricity.
The Grid has been criticised for being slow to offer connections for wind and solar farms.
But Mr Pettigrew said that the log-jam was largely due to developers clogging the queue for connections only to later abandon projects.
Octopus Energy boss Greg Jackson said: “We desperately need to build this infrastructure fast so users get cheaper, more secure electricity."
MUTUAL’S FRIENDS’ £100 GIFT
MEMBERS at Nationwide will be getting a £100 bonus for the second year in a row.
The mutual is dishing out £385million under the Fairer Share scheme to customers who have a savings or mortgage account.
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Only those who were members before March 31 qualify.
Nationwide is also trying to woo new customers by offering £200 cashback and the promise of future bonuses when they open a current account.
Chief exec Debbie Crosbie said the bonus was “only possible because we are owned by members and all our profits are reinvested for their benefit”.
Most banks such as LLOYDS are owned by investors.
The payout came as Nationwide reported pre-tax profits had dipped 22 per cent, from £2.2billion to £1.7billion.
The bonus payment may sweeten members who felt miffed to be denied a vote on Nationwide’s £2.9billion takeover of Virgin Money.
£6.2M HIT FOR HSBC
HSBC has been hit with a £6.2million fine for being unfair to customers who had fallen behind on payments or were in difficulty with money.
The financial watchdog said that the bank put around 1.5 million people at risk of greater harm by taking “disproportionate action” between June 2017 and October 2018.
The fine from the FCA would have been £2.7million more had HSBC not come forward itself about its bad practice.
VETS IN RIP-OFF PROBE
A FORMAL probe has been launched into the veterinary sector and whether the UK’s 16 million pet owners are being ripped off.
The Competition and Markets Authority said changes to the market, worth an estimated £5billion a year, could include maximum prescription fees being introduced.
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Other options include enforcing practices to provide full information to consumers.
Sarah Cardell, from the CMA, said it heard from people who can’t afford the vet bills and they “don’t always know the best treatment options available to them”.
CASH PINCH EASING
BRITS are feeling the most upbeat about their finances since December 2021, figures show.
The Gfk Index is now at -17, a two-point gain from April on the consumer confidence tracker, and ten points better than this time last year.
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Separate stats showed the services sector’s growth has slumped to the weakest level in six months.
The closely watched S&P Purchasing Managers Index also showed services inflation had fallen, which could be good news in the bigger battle to tame consumer inflation.
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