- BREXIT NEGOTIATIONS CONTINUE
The Brexit talks between the UK and the EU continue in Brussels. The Prime Minister, Boris Johnson, says there is a ‘strong possibility’ of not reaching a deal with the EU, although he remains ‘optimistic’. Failure to reach an agreement by 31st December would result in a no-deal Brexit – ‘Australian’ terms that the PM keeps referring to.
A no-deal Brexit would mean that prices could increase for the goods the UK buys and sells from and to the EU. This would be because the UK and EU would trade on World Trade Organisation (WTO) terms, something undesired by countries. On a no-deal Brexit, the EU would impose taxes (known as tariffS) on goods that are coming into the UK. The average tariff for cars is 10%, 35% for dairy products and 2.8% for non-agriculture products. This would, of course, put many businesses under extreme pressure.
Fishing has been an important topic during the trade talks, which is one of the main reasons why the UK and the EU have not yet reached a deal. In the event of a no-deal Brexit, non-UK fishing boats would lose access to UK waters, and UK fishing boats to EU waters. Some things, however, have been decided. Such as, duty free shopping will return, you will need at least 6 months left on your passport and wait in a different queue at the border when you are flying to Europe, a points-based system will be in place in the UK for people wanting to work as part of the new immigration system, and the right to live and work in the EU will no longer be automatic for UK nationals.
- AIRBNB VALUED AT $100BN
Airbnb went public as a Public Trading Company last week, and shares surged. The firm has been valued at $100bn, a huge jump from the $18bn it was valued at earlier in the year. The share sale was priced at $68 a share but the company started trading at over $150 a share amid fierce bidding and closed the day at $144.70. Airbnb slashed staff numbers by 25%, almost 1,900 employees, amid the first pandemic and raised $2bn in emergency funds.
It is believed that the vaccine news had made a difference, as well as the pent up demand for people to take vacations and holidays. The company now has more than 7 million short-term listings worldwide. Last year, roughly 54 million people reserved stays through the company, which takes a cut of each booking and made roughly $4.8bn in revenue last year.
On Wednesday, when the food delivery company DoorDash made its stock market debut its shares soared 85%, raising $3.3bn just last week.
- UK AND SINGAPORE AGREE TRADE DEAL
The UK and Singapore have agreed a free trade deal that is worth £17.6 billion. It is hoped that this deal will bring closer ties and more collaboration in digital and services trade.
With a no-deal Brexit looking extremely likely, the UK will need to quickly get agreements in place to replace the lost arrangements. The deal with Singapore largely mirrors the current arrangement the UK enjoys under its EU membership. Britain’s secretary of state of international trade, Liz Truss, and Singapore’s trade minister, Chan Chun Sing, signed the deal at a ceremony in Singapore.
The agreement will remove tariffs and give both countries access to each other’s markets in services. It will also cut non-tariff barriers for cars and vehicle parts, electronics, pharmaceutical products, medical devices and renewable energy generation. Duties will be eliminated by November 2024. The deal will be important for Singapore, which counts Britain among its top trading partners for goods and services globally, and its top investment destination in Europe.
- BUY NOW PAY LATER FIRMS UNDER FIRE
Buy now, pay later services, such as Klarna, LayBuy and ClearPay, is under fire as consumer group Which and money expert Martin Lewis are calling for full regulation over these companies. These systems spread the cost of payments when purchasing something online, from clothes to products and services. May say that this makes too many get into debt without realising, and spend more than they planned to, with 1/4 saying they spent more because this payment option was available, and 1/10 saying that users incurred late charges when paying in this way.
Klarna alone has almost 10 million customers in the UK and is opening 95,000 accounts a week. Globally it has 85 million customers and was recently valued at around £8bn. As these services remain unregulated, there is no ombudsman that users can go to if a problem is encountered.
Martin Lewis believes these services are primarily targeting under 30s and getting them into debt. But, Klarna’s UK country lead Alex Marsh rejected suggestions that it is targeting naïve young adults, and that Klarna is targeting ‘anyone who values convenience and who wishes to spread the cost of purchases, without incurring any fees’.
- Tier system set for review
Tiers will be reviewed by Wednesday 16th December, which could see areas in the top two tiers of Covid restrictions be moved down a level before Christmas if their covid infection rates have significantly reduced. This would allow hospitality venues to open across areas currently in tier 3 (if they are moved to tier 2) – something that many small businesses are desperate for to survive at a time that is supposed to be the busiest time of the year.
More than 55 million people were placed into tier 2 and tier 3 measures on 2nd December, meaning mixing between households indoors has effectively been banned for the vast majority of the country. The only areas that are in tier 1 are Cornwall, Isle of Wight and the Isle of Scilly, accounting for little more than 1% of the population of England.
There seems to be a clearer escape route to the lower level thanks to the possibility of rapid testing, which was not widely available in the UK before lockdown. However, other areas such as London and Essex risk being placed under tier 3 after data showed a rise in the capital city’s cases. It was announced today that London is now likely to move into tier 3. Epping Forest, which straddles London and Essex, has recorded a 71% increase in cases over the most recent seven-day period, according to the latest data.
The Department of Health said decisions on tier levels would be based on a number of factors, including how quickly cases are rising and falling, local pressure on the NHS, case detection rates in all age groups and, in particular, amongst the over 60.