UK house prices see ‘surprise’ pick-up, says Nationwide

House price growth rebounded last month with the average value hitting a record high of £231,068, according to the Nationwide.

Prices were up 6.9% from a year before, compared with 6.4% in January, it said.

“This increase is a surprise,” said the Nationwide’s Robert Gardner, as price growth had been expected to slow ahead of the end of the stamp duty holiday.

The holiday is due to end on 31 March although there have been reports it could be extended.

The stamp duty holiday means the tax has been suspended on the first £500,000 of all property sales in England and Northern Ireland since July. 

There has also been some relief from the equivalent taxes for property buyers in Scotland and Wales – which is also set to end on 31 March.

An announcement on any changes in stamp duty could come in this week’s Budget. 

A mortgage guarantee scheme to help people with small deposits buy a property ladder is set to be announced in the Budget.

The government will offer incentives to lenders, bringing back 95% mortgages which have “virtually disappeared” during the pandemic, the Treasury says.

House price chart Feb

The Nationwide said house prices rose by 0.7% month-on-month, after taking account of seasonal effects, reversing the 0.2% monthly decline recorded in January.

However, it added that the outlook for the housing market was particularly uncertain right now, and the market could slow because of the employment situation. Many workers remain on furlough, and some of those jobs may not return.

Rival lender the Halifax said last month that the economic realities of 2021 meant activity would slow as the year progressed.

Mr Gardner, Nationwide’s chief economist, said: “It may be that the stamp duty holiday is still providing some forward momentum, especially given the paucity of properties on the market at present.

“Shifts in housing preferences may also be providing a more significant boost to demand, despite the uncertain economic outlook.

“Many peoples’ housing needs have changed as a direct result of the pandemic, with many opting to move to less densely populated locations or property types, despite the sharp economic slowdown and the uncertain outlook.”

‘Flight to safety’

Samuel Tombs, economist at Pantheon Macroeconomics consultancy, said he had been forecasting a fall in house prices this year, but the Nationwide numbers have prompted a rethink.

“Our forecast for house prices to drop by about 2% this year now looks too downbeat, though we’ll wait for details of the guarantee scheme to be released before providing new numbers.”

However, Anna Clare Harper, chief executive of asset manager SPI Capital, said: “Reduced stamp duty is not the only driver of house price growth since the strictest lockdown conditions were removed in 2020. 

“We also have cheap debt as a result of very low interest rates, which gives buyers a ‘discount’; the release of pent-up supply and demand and desire to improve surroundings amongst existing homeowners. 

“There is also the ‘flight to safety’, since in times of uncertainty, people want to put their money in a stable asset with low volatility. These trends are likely to hold up throughout 2021.”

Factbox: Keeping fintech in Britain fit after Brexit

A government-sponsored review of financial technology firms chaired by former Worldpay CEO Ron Kalifa has set out recommendations for government and private sector action to keep the UK competitive, after Brexit left fintechs in Britain adrift from the European Union single market.

The main recommendations are:

* Set up a Digital Economy Taskforce that aligns fintech work done by regulators and government departments;

* Deliver a digital finance package that creates a new regulatory framework for emerging technology;

* Create a 1 billion pound Fintech Growth Fund with institutional investor money to halve the sector’s 2 billion pound funding gap;

* Accelerate growth in Britain’s 25 fintech “clusters”;

* Set up a Centre for Finance, Innovation and Technology (CFIT) to drive a national and international strategy;

* Set up a “scalebox” to support firms that are growing rapidly;

* Create a new visa “stream” to make it easier for fintechs to hire talent from across the world;

* Expand tax credits for research and development;

* Play catchup with New York, Paris, Frankfurt and New York by making it easier for fintechs to list by cutting the minimum number of shares they must make publicly available, and allowing “dual class” shares that give stronger rights to founders;

* Create a suite of fintech indices based on listings of UK fintech to raise the sector’s visibility;

* Review of progress within a year.

Britain sets out blueprint for fintech after Brexit

Brexit, COVID-19 and overseas competition are challenging fintech’s future, and Britain should act to stay competitive for the sector, a government-backed review said on Friday.

Britain’s departure from the European Union has cut the sector’s access to the world’s biggest single market, making the UK less attractive for fintechs wanting to expand cross-border.

The review headed by Ron Kalifa, former CEO of payments fintech Worldpay, sets out a “strategy and delivery model” that includes a new billion pound start-up fund and fast-tracking work visas for hiring the best talent globally.

“It’s about underpinning financial services and our place in the world, and bringing innovation into mainstream banking,” Kalifa told Reuters.

Britain has a 10% share of the global fintech market, generating 11 billion pounds ($15.6 billion) in revenue.

But Brexit, heavy investment in fintech by Australia, Canada and Singapore, and the need to be nimbler as COVID-19 accelerates digitalisation of finance all mean the sector’s future in Britain is not assured, the review said.

Britain increasingly needs to represent itself as a strong fintech scale-up destination as well as one for start-ups, it added.

“Leaving the EU and access to the single market going away is a big deal, so the UK has to do something significant to make fintechs stay here,” said Kay Swinburne, vice chair of financial services at consultants KPMG and a contributor to the review.

The review seeks to join the dots on fintech policy across government departments and regulators, and marshal private sector efforts under a new Centre for Finance, Innovation and Technology (CFIT).

“There is no framework but bits of individual policies, and nowhere does it come together,” said Rachel Kent, a lawyer at Hogan Lovells and contributor to the review.

Britain pioneered “sandboxes” to allow fintechs to test products on real consumers under supervision, and the review says regulators should move to the next stage and set up “scale-boxes” to help fintechs navigate red tape to grow.

“It’s a question of knowing who to call when there’s a problem,” Swinburne said.

The review recommends more flexible listing rules for fintechs to catch up with New York.

($1 = 0.7064 pounds)

UK court blocks Epic Games from contesting Apple’s Fortnite ban

(Reuters) – The UK antitrust tribunal ruled on Monday that Epic Games, the creator of popular game Fortnite, will not be allowed to pursue its case against Apple Inc in the United Kingdom over its App Store payment system and control over app downloads.

The two companies have been at loggerheads since August, when the game maker tried to avoid Apple’s 30% fee on the App Store by launching its own in-app payment system, which led to Apple’s subsequent ban of Fortnite from its store.

The UK tribunal said Epic’s suit against Alphabet Inc’s Google could move forward, but deemed that the United States would be a better forum for its case against Apple.

“Epic will reconsider pursuing its case against Apple in the UK after the resolution of the U.S. case,” the video game company said in a statement in response to the tribunal’s ruling.

Apple and Google did not immediately respond to Reuters requests for comment.

In October, a federal judge in California ruled in an injunction request that Apple could bar the Fortnite game from its App Store but must not harm Epic’s developer tools business, which includes the “Unreal Engine” software used by hundreds of other video games.

Epic Games founder and Chief Executive Tim Sweeney had previously said Apple’s control of its platform had tilted the level playing field.

UK Supreme Court rules Uber drivers are workers

Uber drivers must be treated as workers rather than self-employed, the UK’s Supreme Court has ruled.

The decision means tens of thousands of Uber drivers are set to be entitled to minimum wage and holiday pay.

The ruling could leave the ride-hailing app facing a hefty compensation bill, and have wider consequences for the gig economy. 

In a long-running legal battle, Uber had appealed to the Supreme Court after losing three earlier rounds.

‘Massive achievement’

Former Uber drivers James Farrar and Yaseen Aslam, who originally won an employment tribunal against the ride hailing app giant in October 2016, told the BBC they were “thrilled and relieved” by the ruling.

“I think it’s a massive achievement in a way that we were able to stand up against a giant,” said Mr Aslam, president of the App Drivers & Couriers Union (ADCU).

“We didn’t give up and we were consistent – no matter what we went through emotionally or physically or financially, we stood our ground.”

Lord Leggatt said that the Supreme Court unanimously dismissed Uber's appeal
image captionLord Leggatt said that the Supreme Court unanimously dismissed Uber’s appeal

Uber appealed against the employment tribunal decision but the Employment Appeal Tribunal upheld the ruling in November 2017. 

The company then took the case to the High Court, which upheld the ruling again in December 2018.

The ruling on Friday was Uber’s last appeal, as the Supreme Court is Britain’s highest court, and it has the final say on legal matters. 

Delivering his judgement, Lord Leggatt said that the Supreme Court unanimously dismissed Uber’s appeal that it was an intermediary party and stated that drivers should be considered to be working not only when driving a passenger, but whenever logged in to the app.

The court considered several elements in its judgement:

  • Uber set the fare which meant that they dictated how much drivers could earn
  • Uber set the contract terms and drivers had no say in them
  • Request for rides is constrained by Uber who can penalise drivers if they reject too many rides
  • Uber monitors a driver’s service through the star rating and has the capacity to terminate the relationship if after repeated warnings this does not improve

Looking at these and other factors, the court determined that drivers were in a position of subordination to Uber where the only way they could increase their earnings would be to work longer hours.

Jamie Heywood, Uber’s Regional General Manager for Northern and Eastern Europe, said: “We respect the Court’s decision which focussed on a small number of drivers who used the Uber app in 2016. 

“Since then we have made some significant changes to our business, guided by drivers every step of the way. These include giving even more control over how they earn and providing new protections like free insurance in case of sickness or injury. 

“We are committed to doing more and will now consult with every active driver across the UK to understand the changes they want to see.”

‘Drivers are struggling’

The Supreme Court’s ruling that Uber has to consider its drivers “workers” from the time they log on to the app, until they log off is seen as a key point.

Uber drivers typically spend time waiting for people to book rides on the app. Previously, the firm had said that if drivers were found to be workers, then it would only count the time during journeys when a passenger is in the car.

“This is a win-win-win for drivers, passengers and cities. It means Uber now has the correct economic incentives not to oversupply the market with too many vehicles and too many drivers,” said James Farrar, ADCU’s general secretary.

“The upshot of that oversupply has been poverty, pollution and congestion.”

Uber app on phone

However, questions still remain about how the new classification will work, and how it affects gig economy workers who work not only for Uber, but also for other competing apps. 

Mr Aslam, who claims Uber’s practices forced him to leave the trade as he couldn’t make ends meet, is considering becoming a driver for the app again. But he is upset that it took so long.

“It took us six years to establish what we should have got in 2015. Someone somewhere, in the government or the regulator, massively let down these workers, many of whom are in a precarious position,” he said.

Mr Farrar points out that with fares down 80% due to the pandemic, many drivers have been struggling financially and feel trapped in Uber’s system.

“We’re seeing many of our members earning £30 gross a day right now,” he said, explaining that the self-employment grants issued by the government only cover 80% of a driver’s profits, which isn’t even enough to pay for their costs.

“If we had these rights today, those drivers could at least earn a minimum wage to live on.”

Impact on Uber

When Uber listed its shares in the US in 2019, its filing with the US Securities and Exchange Commission (SEC) included a section on risks to its business.

The company said in this section that if it had to classify drivers as workers, it would “incur significant additional expenses” in compensating the drivers for things such as the minimum wage and overtime.

“Further, any such reclassification would require us to fundamentally change our business model, and consequently have an adverse effect on our business and financial condition,” it added.

Uber also wrote in the filing that if Mr Farrar and Mr Aslam were to win their case, HM Revenue & Customs (HMRC) would then classify the firm as a transport provider, and Uber would need to pay VAT on fares.

The company has long argued that it is a booking agent, which hires self-employed contractors that provide transport.

By Mary-Ann Russon
Business reporter, BBC News

Food and furniture costs drive inflation higher

Prices rose in the UK last month, pushed up by higher food prices and more expensive household goods, official figures suggest.

Inflation, as measured by the Consumer Prices Index, rose 0.7% in the 12 months to January, up from December’s 0.6%, the Office for National Statistics said.

The rise was bigger than many economists’ forecasts.

Food and non-alcoholic drinks were a major reason for higher inflation.

They pushed up prices by 0.6%, compared with a fall of 0.1% last time. Premium potato crisps and cauliflowers saw big increases after being discounted in December, the ONS said.

Jonathan Athow, deputy national statistician for economic statistics at the ONS, said household goods prices were also higher because there had been less discounting on items such as bedding or sofas.

But Mr Athow pointed out that January discounting had continued in some form: “However, there were widespread January sales, with particular price cuts for clothing and footwear.”

Statisticians said that clothes prices are typically discounted in December and January for festive shoppers, with a 4.6% fall in costs between December and January.

Another large contributor to rising costs was restaurants and hotels.

Prices in this category were estimated to have risen by 0.9%, largely driven by hotels. Amid the current lockdown restrictions, holiday travel is not allowed in the UK.

UK pubs group Mitchells & Butlers to raise $486 million

(Reuters) – Mitchells & Butlers said on Monday it intends to raise 350 million pounds ($486.05 million) through an open offer of shares, and has reached an agreement with its bankers for a new credit facility.

The company also said Piedmont Inc, Elpida Group and Smoothfield Holding, which collectively own around 55% of the pub owner, had formed a consortium called Odyzean Ltd to become its majority shareholder.

KPMG UK appoints first female leaders in 150 years

KPMG UK has appointed its first female leaders in its 150-year history, replacing boss Bill Michael who was forced to step aside.

Bina Mehta has been asked to step in as acting chairman and Mary O’Connor will take over Mr Michael’s day-to-day executive responsibilities as acting senior partner.

Mr Michael faces an investigation over alleged offensive remarks he made.

He reportedly told consultants to “stop moaning” about the pandemic’s impact. 

Mr Michael has stepped aside while the investigation is carried out into his alleged comments made during an online meeting on Monday. 

It has also been reported that he told staff to stop “playing the victim card” dismissing staff concerns about job stress during Covid-19.

He later apologised, saying the comments did not reflect his beliefs. Mr Michael has run KPMG UK since 2017 as chairman and senior partner.

The accounting giant, which employs more than 220,000 people globally, immediately began an “independent investigation” which will be carried out by law firm Linklaters. 

His remarks triggered angry responses from some staff on an app used to post comments anonymously during the meeting.

Current and former KPMG insiders said they thought it was unlikely that Mr Michael would return as chairman, according to a report in the Financial Times.Mr Michael, who was hospitalised with Covid-19 last year, was paid £1.7m in 2020, KPMG UK revealed last week.

There have been claims in the past from some staff of a toxic work culture.

Source: BBC Business

Covid-19: NHS app has told 1.7 million to self-isolate

The NHS Covid-19 app has told 1.7 million people in England and Wales to self-isolate to date.

Health ministers have also revealed they believe it has prevented about 600,000 cases of the disease.

In a further disclosure, internal data indicates that about 16.5 million people are currently actively using its contact-tracing tool.

That figure is 24% below the app’s latest download tally, which is the government’s preferred measure.

The discrepancy is likely to be down to people uninstalling the app, turning off its contact-tracing capabilities, or simply failing to have activated it in the first place.

Each handset actively taking part sends a digital “heartbeat” once a day to the Amazon computer server involved, allowing the current usage figure to be calculated.

And while the number of total downloads has slowly grown from 20.2 million to 21.7 million over the past two months, the number of phones pinging the server has been more or less flat.

Risking lives

This represents the first detailed data released about the app’s use since it was made widely available to people in England and Wales in September.

Scotland, Northern Ireland, Jersey and Gibraltar have their own separate apps.

Baroness Dido Harding, executive chair of the NHS Test and Trace programme, had been under pressure to release the figures for months, and the BBC unsuccessfully attempted to obtain some of the figures via a Freedom of Information request in November.

App advert
image captionThe app could reduce the number of infections once lockdowns end and people spend more time outside their homes

The intention in releasing the data now is to reassure the public that the app can save lives, and in doing so encourage more people to both install it and follow its advice ahead of lockdowns being eased.

“People who are not following the app’s instructions are risking themselves and their colleagues and their families,” Baroness Harding told the BBC.

“The more you follow the instructions of the app, the fewer outbreaks you’ll have in your workplace and the safer it will be.”

A spokeswoman added that these instructions include circumstances in which it is recommended to pause the contact-tracing function.

Anonymised findings

The app uses Bluetooth logs to retrospectively warn users if they were at high risk of contagion from someone infected with the virus, who was recently in their vicinity.

Alerts can be served within 15 minutes of an infected person approving use of their positive test result. But the system’s decentralised nature means neither the person who triggered the warning, nor the authorities, can identify who receives the notifications.

Some anonymised data is, however, collected.

For the first time, it has been revealed that:

  • 1.4 million people have reported symptoms into the app. The software may order users to stay at home as a result, but does not cascade alerts to others
  • 825,388 people have entered a positive test result into the app. This has led to more than 1.7 million self-isolate alerts being sent
  • the app’s QR barcode-based venue check-in feature has been used more than 103 million times
  • 253 venues have been determined to be at risk as a consequence of the QR code facility since 10 December, triggering alerts to visitors to monitor their symptoms
QR code
image captionRestaurants are among venues each to have been given a unique QR barcode

Tier-driven data

Researchers from the Oxford Big Data Institute worked with the Alan Turing Institute to provide further analysis of the app’s impact.

They estimate that 600,000 cases have been averted because of the technology.

And they forecast that for every additional 1% of the population that uses the app, the number of Covid cases should fall by 2.3%.

The academics have benefited from the fact that the app was retooled in October to take account of the tier system introduced at the time in England, which operated on a local authority basis.

This allowed anonymised usage data to be compared between two neighbouring council areas where the spread of the pandemic was similar, but uptake of the app differed.

The researchers took account of other factors – including poverty levels – to calculate the degree to which suppression of the virus’s spread could be linked to the app.

However, they acknowledge that they cannot be certain that usage of the app caused all of the effects being attributed to it. And while they are publishing their work, it has yet to be peer-reviewed.

Even so, the firm involved in developing the app said confidence was growing that it is indeed making a difference. 

“The data suggests that we have made a dent in the overall infection rate,” Wolfgang Emmerich, chief executive of Zuhlke UK, told the BBC.

“What we really have to do now, particularly as we’re preparing to come out of lockdown, is to drive that adoption rate back up and to get people to switch [the app] back on again.”

Mr Emmerich also revealed that his team had put plans to extend the app to older iPhone models on the back burner, in order to prioritise other new features, but declined to say what they are.

Presentational grey line
Analysis box by Rory Cellan-Jones, technology correspondent

Soon after the NHS Covid-19 app was launched last September, we learned one important piece of data – that over 20 million people had downloaded it. 

That was a pretty good result compared with take-up of similar apps elsewhere, but what we didn’t know until now was something far more important – did it work? 

Now these figures do appear to show that plenty of people have been pinged by the app and sent into isolation. 

More impressively, research appears to show that in areas where take-up of the app was high, the infection spread more slowly than in places where it was lower. 

But other scientists will want to drill down for themselves into whether other factors were at play in the link between high take-up and low infection rates. 

Plus the private nature of the app means there are some key questions that can’t be answered:

  • how many people obeyed the ping on their phone telling them to self-isolate?
  • how many of them had been separately contacted by the manual track and trace operation anyway?
  • how many of those alerts were false positives or negatives, meaning people who were not at risk were told to self-isolate while the reverse was true of others?
  • how many people have grown bored with the app and switched off Bluetooth or uninstalled it? 

Still, using a Bluetooth app to trace people who might be infected with Covid-19 was always an experiment with an untested technology.

And the scientists who have been working on this project for many months now feel they’ve proved that it has made a significant contribution to the fight against the virus.

UK coronavirus variant spreading ‘rapidly’ through US, study finds

The coronavirus variant that has moved through the UK is now spreading “rapidly” through the US, according to a new study published on Sunday. 

The more contagious strain is nearly doubling its prevalence among confirmed cases in the US every nine days. 

The spread of the variant, known as B.1.1.7, has put added pressure on vaccination efforts worldwide. 

The US Centers for Disease Control and Prevention (CDC) has predicted it could be the predominant strain by March. 

The report, posted on the preprint server MedRxiv, is a collaboration of several researchers and scientists. It has not yet been peer-reviewed or published in a journal. 

Case numbers of the new variant are still somewhat small in the US. 

According to the CDC, Florida leads the country in reported cases of B.1.1.7 with 187 as of Thursday, followed by California with 145. 

“Our study shows that the US is on a similar trajectory as other countries where B.1.1.7 rapidly became the dominant SARS-CoV-2 variant, requiring immediate and decisive action to minimize Covid-19 morbidity and mortality,” the report’s authors wrote.

This new strain is 35-45% more transmissible than other strains of the virus currently in the US, the report found.

When the CDC first warned of the new variant’s presence in the US in mid-January, it was present in less than 0.5% of cases. By the end of the month, this figure had jumped to 3.6%, according to the study. 

The report comes as the United States’ winter virus surge passes its peak. Daily cases throughout the country have been falling for about a month, since early January. But the average daily death toll remains extremely high – some 3,000 per day – and hospitals remain under immense pressure. captionFive challenges of distributing a Covid-19 vaccine around the world.

The B.1.1.7 variant, first discovered in Britain, has so far spread to more than 50 countries.

As with the original virus, the risk is highest for the elderly and for those with significant underlying health conditions. 

There has been some suggestion that the strain may be associated with a 30% higher risk of death, but the evidence on this is not strong, and the data is still uncertain. 

Current vaccines were designed around earlier variants but initial studies have indicated that that the Pfizer, Oxford-AstraZeneca and Moderna vaccines will all protect against the B.1.1.7 strain.