In the City: Can the UK Spending Review Turn Ambition into Action?
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Yahoo
8 hours ago
- Yahoo
Is the runaway Lloyds share price about to hit a nasty bump?
The Lloyds (LSE: LLOY) share price has been bombing along lately. It's up 30% over the last year, and 166% over five years. With an average yield of around 4% or 5% over that period, long-term investors are finally reaping the rewards. Lloyds and the rest of the FTSE 100 banks have finally shaken off the ghosts of the financial crisis, even if it did take more than 15 years. Profits are rising, revenues are healthy, and shareholders are being rewarded with regular dividends and share buybacks. That pattern continued last Thursday (24 July), when Lloyds Banking Group posted strong half-year results. Pre-tax profits to June rose 5% to £3.5bn, driven by a 6% rise in net income, helped by growth in lending and deposits. FTSE 100 sector revival Lending to customers climbed £11.9bn to £471bn, with most of that coming from retail mortgages. Deposits were up £11.2bn to £493.9bn, helped by inflows into savings accounts. Shareholders joined in the fun, as the board lifted the interim dividend by 15% to 1.22p per share. I've now almost doubled my money since buying these shares in 2023, from a combination of dividend income and share price growth. It was a confident performance, and CEO Charlie Nunn didn't hold back. He said the bank was making 'great progress' towards its 2026 growth goals, delivering 'more sustainable returns' for shareholders. There could be more good news to come as Chancellor Rachel Reeves looks set to ease financial services regulations to get the economy moving. Nunn has publicly supported moves to reform ring-fencing rules that force banks to separate their retail arms from riskier divisions, and ease restrictions on banks offering investment advice to customers. Despite those positives, the economy remains fragile with inflation sticky at 3.6%, squeezing consumer demand and mortgage affordability. As the UK's biggest lender, Lloyds is especially exposed here. A plus is that higher inflation support its net interest margins. Scandal clouds the outlook Lloyds faces a bigger threat. The motor finance mis-selling scandal could become very costly indeed. Analysts estimate the compensation bill across the industry could hit £44bn if the Supreme Court rules against the banks, with Lloyds heavily exposed via its Black Horse division. It's due to report at 4.35pm on Friday 1 August. So far, Lloyds has only put aside £1.2bn. That's a long way short of what might be required if the worst happens. Reeves is reportedly considering retrospective legislation to limit the damage, but this would be a highly controversial move. The market doesn't seem to be pricing in the full scale of the risk just yet. That makes me uncomfortable. If the ruling favours Lloyds, its shares could bounce nicely. If it doesn't, they could plunge. Yet investors seem relatively unfazed. That seems odd to me. Dividends and potential growth Longer term, I still think the investment case for Lloyds is strong. It's delivering heaps of income and growth, and may well benefit from looser regulation. I'm not selling, whatever the Supreme Court decides. But I wouldn't consider adding to my stake until after the Supreme Court issues its verdict. The post Is the runaway Lloyds share price about to hit a nasty bump? appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Harvey Jones has positions in Lloyds Banking Group Plc. The Motley Fool UK has recommended Lloyds Banking Group Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025 Sign in to access your portfolio
Yahoo
19 hours ago
- Yahoo
Ministers want to overhaul rules to make it easier to open pubs and music venues
Ministers have pledged to make it easier to open new bars, music venues and cafes as part of plans to rejuvenate the high street. Chancellor Rachel Reeves has said she wants to 'protect pavement pints' as a new licensing framework will also fast-track permissions for al fresco dining in dedicated areas as the Government looks to modernise planning rules. The Government wants to make it easier to convert disused shops into venues, and dedicated 'hospitality zones' will be brought forward that could see permissions for outside dining, street parties and extended opening hours pushed through quickly. Developers will also be made responsible for soundproofing buildings they construct near pubs or clubs, to protect existing venues from noise complaints. The Government has said the plans will be subject to a call for evidence. The Business Secretary has said that 'red tape has stood in the way of people's business ideas for too long'. Jonathan Reynolds said: 'This Government has a plan to replace shuttered up shops with vibrant places to socialise, turning them into thriving cafes or busy bars, which support local jobs and give people a place to get together and catch up over a beer or a coffee. 'Red tape has stood in the way of people's business ideas for too long. Today we're slashing those barriers to giving small business owners the freedom to flourish.' Ms Reeves said that 'pubs and bars are at the heart of British life'. 'For too long, they've been stifled by clunky, outdated rules. We're binning them, to protect pavement pints, al fresco dining and street parties – not just for the summer, but all year round,' she added. An industry body warned earlier in July that the equivalent of more than one pub per day will close across Great Britain this year, pointing to high bills and taxes. The British Beer and Pub Association (BBPA) estimated that 378 pubs will close this year across England, Wales and Scotland, which it said would amount to more than 5,600 direct job losses. The projected 2025 figures compare with 350 closures in 2024. Bar chain Brewdog announced this week that it would close 10 of its venues, as chief executive James Taylor told staff it is partly in response to 'rising costs, increased regulation, and economic pressures'. Representatives of the hospitality industry welcomed the changes but said they should go hand in hand with a cut to business rates as cost pressures threaten to 'tax out of existence' some businesses. Kate Nicholls, chairwoman of UKHospitality, said: 'We strongly welcome these proposals to cut red tape and make it easier to open and operate hospitality venues, create jobs and grow the economy. 'But positive and encouraging as these measures certainly are, they can't on their own offset the immediate and mounting cost pressures facing hospitality businesses which threaten to tax out of existence the businesses and jobs that today's announcement seeks to support.' Emma McClarkin, chief executive of the British Beer and Pub Association, said: 'After bringing together key voices in the pubs and the wider hospitality sector, it's great news that many of the industry's recommendations on how best to cut red-tape and support growth will be acted on. 'These changes must go hand in hand with meaningful business rates reform, mitigating staggering employment costs, and a cut in beer duty so that pubs can thrive at the heart of the community.' Andrew Griffith MP, shadow business secretary, said: 'Though any cutting of red tape for hospitality businesses is welcome, this is pure hypocrisy and inconsistency from Labour.' He said the Government was 'crippling the hospitality industry by doubling business rates, imposing a jobs tax and a full-on strangulation of employment red tape'. 'As the result, shorter opening hours, shedding jobs and expensive pints are becoming the norm.'
Yahoo
a day ago
- Yahoo
‘Urgent' need for digital reform of banking payments, says Bank of England boss
Bank of England governor Andrew Bailey has said that 'urgent' reforms of retail banking payments should be a priority as he remains to be 'convinced' over the need for a digital pound. In his annual Mansion House dinner speech, Mr Bailey said the UK needs to 'harness the potential of digital technology for retail payments' both within Britain and internationally to help future-proof payments infrastructure and ensure it can play its part in boosting growth in the UK. But he added a dose of scepticism over any plans for a digital pound and reiterated concerns over so-called stablecoins – a type of cryptocurrency which is backed by a traditional asset such as a currency or commodity. Mr Bailey said: 'There is an urgent need for innovation now in the area of payments, and the opportunity is there, no doubt about that.' He said the Bank would collaborate with authorities and industry to 'design and deliver the next generation of UK retail payments infrastructure'. 'This must be a priority, both to replace ageing infrastructure and as part of promoting growth in the UK,' he said, echoing financial services reforms outlined by Chancellor Rachel Reeves on Tuesday to help boost the economy. Mr Bailey added: 'There may well be a role for stablecoins going forward, but I don't see them as a substitute for commercial bank money. 'Moreover, our job will be to ensure that those stablecoins that purport to be money are safe. 'Perhaps there may also be a role for retail central bank digital currency, but I remain to be convinced why the natural next step is to create a new form of money rather than put digital technology into retail payments and bank accounts.' His comments follow just days after he warned global banking giants against issuing their own stablecoins, which he said threaten to take money out of the banking system and therefore leave less available for lending. Mr Bailey has also appeared to be increasingly cooling on the idea of a digital pound in recent months, raising doubts over whether it would ever be officially launched. In his speech, Mr Bailey cautioned over the ongoing impact of the global trade war, with the current shift in policy marking the 'most sudden and fundamental in the post-war era'. 'The shifts we have witnessed – and continue to witness – mark a generational change in the system of trade amongst nations,' he said. 'Increasing tariffs creates the risk of fragmenting the world economy, and thereby reducing activity,' he said. 'Recent events have exposed fault lines in the multilateral system of relations between nations, including in the global trading system,' he added. He said the International Monetary Fund (IMF) and the Word Trade Organisation (WTO) can both work together and play a part in cooling the current trade war by helping 'achieve agreement amongst its members on the global rules of the road and how they are adhered to'. But he stressed he cannot 'underestimate the challenges' in addressing the current trade tensions. Sign in to access your portfolio
