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What's happening in the world of accountancy today

News in brief

Author: ICAEW Insights

Published: 06 Jun 2024

The daily News In Brief is taking a short hiatus and will return later this month.

7 June 2024: AI helping reduce animal testing; public rush to obtain valuable King Charles banknotes; price rises see sales surge at McVitie’s Digestives maker; UKEB seeks consultations on IASB Exposure Drafts.

Artificial intelligence may help end animal testing. AI systems are now being used to quickly scan decades of existing global animal testing results for specific information requests, preventing the need for unnecessary new tests. While the success rate is still variable, in a number of cases AI is already proving to be more accurate than animal testing, the BBC reported.

New King Charles banknotes are now in circulation, with people queuing hours to withdraw them. The first to feature a portrait of King Charles, the four notes are considered by some more valuable than their currency worth of £5, £10, £20 and £50, and collectors are eager to obtain them. Many have already appeared on Ebay for up to triple their value, the Guardian reported.

Price rises helped sales surge at the maker of McVitie’s Digestives, Jaffa Cakes, Jacob’s Cream Crackers and Mini Cheddars in 2023. UMV Global Foods Holding Company Limited is part of the London-based Pladis, itself a subsidiary of Yildiz Holding. It posted a revenue of £1.2bn for the 12 months, up from £1.1bn, and a pre-tax profit of £17.3m, up from £600,000, City A.M reported.

The UK Endorsement Board has issued two Draft Comment Letters for consultations in response to the IASB’s two Exposure Drafts on Contracts for Renewable Electricity and Business Combinations. It was broadly supportive of the latter, issuing some suggestions for enhancements. However, regarding the Contracts for Renewable Electricity, it was concerned with proposed amendments to the ‘own use’ requirements in IFRS 9, due to lack of a clear conceptual basis. Instead, the Board recommends that the IASB retains the current requirements. 

6 June 2024: Manchester challenges London as UK’s skyscraper capital; Eurozone business activity grows; Google faces £13.6bn advertising lawsuit.

London may lose its title as hosting the tallest residential skyscraper in the UK. Land in Manchester city centre has been earmarked for a proposed 241-metre-high development. The 76-storey skyscraper would become the tallest residential building in Western Europe. It would take the title from The Landmark Pinnacle in London’s Tower Hamlets which stands at 233 metres, City A.M reported.

Business activity grew across the eurozone at the fastest rate in a year in May while inflation cooled. Businesses said they had put up prices at a slower rate than in April, leading to lower inflation across the eurozone, despite a rise in the price of raw materials and other input costs beyond the levels seen before the pandemic. The headline business activity index climbed to a one-year high of 52.2 in May from 51.7 in April, the Guardian reported.

Google must face a £13.6bn lawsuit alleging it has too much power over the online advertising market, the Competition Appeal Tribunal has ruled. Ad Tech Collective Action LLP alleged the search giant behaved in an anti-competitive way which caused online publishers in the UK to lose money. The case is opt-out, meaning all relevant UK publishers are included unless they indicate otherwise. It is being funded by an unknown third-party, and says UK publishers who form part of the claim will not pay costs to participate, the BBC reported.

5 June 2024: Epoch Times CFO charged in money-laundering plot; UK acquisition deals drop; falling UK inflation not leading to rise in spending.

The CFO of the Epoch Times news outlet has been arrested over alleged involvement in a money-laundering scheme. Federal prosecutors allege that Bill Guan participated in a global plot to launder at least $67m (£52m) of illegal cash to benefit himself and the Epoch Times. Guan led the outlet's Make Money Online team, which reportedly used cryptocurrency to purchase tens of millions worth of crime proceeds in 2020. Within one year, the outlet’s annual revenue rose 410%, the BBC reported.

The number of UK mergers and acquisitions (M&A) fell to 100 in March, down from 174 in January. This is their lowest on record since 2020. It came as the rate of foreign companies buying British businesses almost halved throughout the quarter, from £10bn to £6bn. There were 426 M&A transactions in the first quarter of the year, 18 fewer than the previous quarter, City A.M reported.

Consumer spending growth is at its weakest in more than three years. This comes as higher council tax bills and the rising cost of broadband and mobile phones eat into household budgets. A Barclays report found an improvement in consumer confidence as a result of falling inflation was not leading to a pickup in spending, the Guardian reported. 

4 June 2024: Half a million left without Child Benefit payment; GameStop shares soar as ‘Roaring Kitty’ reveals £91m bet in Reddit post; Shein to file prospectus for £50bn London float.

About half a million people have been left without their Child Benefit payment, reported The BBC, after a technical issue at HMRC. HMRC says it is working to resolve the batch processing issue, which meant that around 30% of Monday’s scheduled payments did not go through. Many parents took to social media to complain about the missing payment with some saying they have been left unable to buy food or pay for their child’s bus fare. HMRC is asking customers not to contact them, saying more information will be provided via social media as soon as it is available. The UK's tax authority, which administers Child Benefit payments, says the missed payments will be made, but cannot yet say when.

GameStop shares surged more than 70% premarket on Monday, reported The Guardian. This was after “Roaring Kitty” Keith Gill, the stocks influencer behind the 2021 retail trading frenzy, returned to Reddit with a post showing a $116m (£91m) bet on the embattled videogame retailer. Roughly $390m (£306m) worth of GameStop shares had changed hands by 5:53am Eastern Time, more than the $343m (£269m) in Wall Street favourite Nvidia, according to LSEG data. It was the first post in three years from Gill’s Reddit account, where screenshots of his bullish GameStop trades had in 2021 triggered a rush of demand for “meme stocks” – often companies with weak fundamentals that gained a cult-like following through social media hype.

Online fashion giant Shein to file prospectus for £50bn London float, reported Sky News. This flotation would rank among the most significant – and contentious – deals in the UK’s capital markets for years. Sky News can exclusively reveal that Shein, which was founded in China but is headquartered in Singapore, is preparing to file a prospectus with the Financial Conduct Authority for approval ahead of its potential float. City sources said on Sunday evening that the confidential filing could take place as soon as the coming week, although it could yet take place later this month.

3 June 2024: House prices creep up as market shows 'resilience'; Santander staff and '30 million' customers hacked; CMA to investigate £2.9bn takeover of Virgin Money by Nationwide.

Hackers are attempting to sell what they say is confidential information belonging to millions of Santander staff and customers, The BBC reported. They belong to the same gang which this week claimed to have hacked Ticketmaster. The bank - which employs 200,000 people worldwide, including around 20,000 in the UK - has confirmed data has been stolen. Santander has apologised for what it says is "the concern this will understandably cause" adding it is "proactively contacting affected customers and employees directly."

The UK competition regulator has launched an inquiry into the £2.9bn takeover of Virgin Money by the rival lender Nationwide Building Society, The Guardian reported. The Competition and Markets Authority (CMA) said it had opened the first stage of its merger process to look at whether the deal – one of the largest transactions in the banking sector since the 2008 financial crisis – would lead to substantial lessening of competition. The CMA is seeking comments on the tie-up before 14 June and has set a deadline of 26 July for its phase 1 decision on whether to move to a more formal investigation.

The housing market is showing signs of "resilience" with prices rising slightly, according to new figures from the UK's largest building society. Nationwide said house prices were up 0.4% in May, compared to April. It said the average cost of a home was now £264,249 - with year-on-year prices also increasing by 1.3%. The figures represent a rebound in month-on-month prices, after they fell on Nationwide's index by -0.4% in April and -0.2% in March. Other lenders have also reported modest falls in recent months, Sky News reported.

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