BUSINESS LIVE: Borrowing reaches £16.6 billion; HSBC turmoil; Mulberry says Frasers takeover is ‘unsustainable’

The City Watchdog is keeping social media personalities under fire to tackle illegal advertising of financial services products.

The Financial Conduct Authority (FCA) said 20 social media influencers – known as ‘finfluencers’ – are being interviewed under caution.

Interest rates will fall to 2.75 percent over the next year, a boost for millions of borrowers, Goldman Sachs has predicted.

Economists at the Wall Street giant believe the Bank of England will make sharper cuts than market prices suggest, suggesting interest rates will fall to 3.5 percent.

Rachel Reeves has been urged to make it easier for small businesses to sell abroad, which could mean a boost of almost £10 billion for Britain.

Business lobby group Walpole – which represents hundreds of luxury companies including Burberry and Aston Martin – wants an incentive to encourage British companies to export.

Chief executive Helen Brocklebank wrote to the Chancellor this month, saying businesses need help to help with ‘the first few precious years of operating in a new market’.

Mulberry has rejected a second takeover proposal from Mike Ashley’s Frasers Group, dismissing the group’s latest offer as ‘untenable’.

Frasers increased its proposal to 150 pence per Mulberry share on October 11, valuing the luxury brand, best known for its handbags, at £111 million.

Mulberry’s largest shareholder, Challice Limited, the vehicle of Singapore-based property magnate Ong Beng Seng and his wife Christina, which owns 56.4 percent, said two days later it would not support Frasers’ proposal.

Under British takeover rules, Frasers, which owns 37 percent of Mulberry, has until October 28 to make a firm offer or walk away.

Shares in Mulberry closed at 125p on Monday.

HSBC has unveiled an overhaul of its global structure as new boss Georges Elhedery looks to cut costs and focus on the bank’s leading divisions.

The bank said it was merging its commercial and institutional banking businesses and creating a new international wealth and premier banking division.

It also structured its existence simplifographically through the creation of ‘Eastern Markets’, comprising Asia and the Middle East, and ‘Western Markets’, comprising Britain, Europe and America.

HSBC also announced the appointment of Pam Kaur as its new Chief Financial Officer, after he joined the bank more than a decade ago.

Elhedery said: “The changes we are announcing today will make it easier for our colleagues to serve our customers and drive the Group’s future success. The new structure will result in a simpler, more dynamic and agile organization as we focus on executing our strategic priorities, which remain unchanged.

‘Our home markets of Great Britain and Hong Kong, together with our corporate and institutional banking and our wealth and Premier banking businesses, are HSBC’s key strengths.

“By making these changes, we can better focus on increasing leadership and market share in those companies that have a clear competitive advantage and the greatest growth opportunities.

“This is how we will accelerate our plans to execute our strategy, unleash the bank’s full potential and ensure our talented colleagues can thrive and deliver the best products and excellent service to our customers.”

Lindsay James, investment strategist at Quilter Investors:

‘UK finances are close to breaking point as public sector net debt, excluding public sector banks, was estimated at 98.5 percent of GDP at the end of September 2024.

‘This is an increase of 4 percent compared to the same period last year. The last time such levels were seen was in the 1960s, when the then Labor chancellor was eventually forced into a policy of tax increases and cuts.

‘Although Rachel Reeves has promised that Britain will not see a return to austerity, a series of tax rises in some form is all but guaranteed for next week’s Budget.

‘The Chancellor has warned the British public that there is a very large budget ‘black hole’ to be filled and has repeatedly indicated that difficult decisions will be needed.

‘The Labor Government will want to avoid a repeat of the negative reactions from financial markets in recent years to unfunded tax cuts and spending plans, so the Chancellor will need to be transparent in announcing any changes and the expected costs.

‘The mood has been somber in the run-up to the Budget, and while it remains to be seen how the market will react to any announcements, there are still some positives for the UK economy.

‘For the first time in more than three years, inflation is now well below the Bank of England’s 2% target. The economy finally grew in August after two months of stagnation, and while higher interest rates are starting to take their toll on the labor market, there are still signs of progress.

All told, the Bank of England is expected to continue on its ‘slow and steady’ path, with the potential for a further 0.25% cut at its next monetary policy meeting, which could help boost consumer confidence and provide a much-needed boost to give. for the economy.’

UK government borrowing stood at £16.6 billion last month, well above the Office for Budget Responsibility’s projections of £15.1 billion, making it the third highest September borrowing figures on record.

However, the value was lower than City’s forecast of £17.5 billion for the month.