With the UK budget now in the rear-view mirror, and the earnings season drawing to a close, investors begin to shift focus to the Bank of England’s rate decision on March 23. Yet, policymakers may well have to share the limelight with the banking system as the collapse of two US banks and the crisis around Credit Suisse Group AG jolt the financial markets. Elsewhere in the corporate world, the Scottish engineering firm Wood Group has given Apollo more time to decide on a firm offer for its busin
(Bloomberg) — With the UK budget now in the rear-view mirror, and the earnings season drawing to a close, investors begin to shift focus to the Bank of England’s rate decision on March 23. Yet, policymakers may well have to share the limelight with the banking system as the collapse of two US banks and the crisis around Credit Suisse Group AG jolt the financial markets. Elsewhere in the corporate world, the Scottish engineering firm Wood Group has given Apollo more time to decide on a firm offer for its business after snubbing the three earlier proposals.
Here’s the key business news from London this morning:
In The City
John Wood Group Plc: The deadline by which Apollo Global Management is required to announce a firm intention to make an offer for John Wood Group has been extended to April 19 from March 22.
- Earlier in March, the Scottish engineering firm has dismissed a £1.64 billion ($2 billion) cash offer from the private equity behemoth as too low, saying it undervalued its businesses
- The 237-pence-a-share approach followed three earlier proposals from New York-based Apollo
EMIS Group Plc: The healthcare technology company has been granted five days to address competition concerns raised by the UK antitrust watchdog regarding its proposed takeover by US-based UnitedHealth Group Inc.
- The Competition and Markets Authority’s initial investigation has found that UnitedHealth’s deal to buy EMIS Group could reduce competition leading to worse outcomes for the National Health Service, the regulator said in a statement
Diploma Plc: The company raised gross proceeds of about £235 million from a placing.
- The funds will provide the firm greater flexibility to execute its M&A pipeline, including the acquisition of Tennessee Industrial Electronics for about £76 million.
In Westminster
The UK government offered a 5% pay rise to nurses, midwives and ambulance workers for the next financial year, in a bid to end months of strikes. The proposal for NHS workers includes a one-time bonus worth 2% of salary for 2022-23, along with a one-time “NHS backlog bonus” worth at least £1,250 per person, according to the Department of Health and Social Care. Unions are expected to put the proposal to their members for a vote over the coming weeks.
Britons have been grappling with walkouts in several sectors, including rail, healthcare and the civil service. The Institute for Fiscal Studies estimates that Chancellor Jeremy Hunt would have to dip into a £14 billion pot of reserves to fund pay raise for UK public sector workers.
Meanwhile, TikTok has been banned from UK government phones with immediate effect over security fears, making Britain one of the latest countries to impose restrictions on the Chinese-owned social media app after similar moves by the US and European Union. The decision comes after a review concluded that there “could be a risk around how sensitive government data is accessed and used by certain platforms,” Cabinet Office Secretary Oliver Dowden said Thursday, calling the ban “a precautionary move.”
A spokesperson for the Chinese embassy in the UK said the decision was based on “political motives” rather than facts.
In Case You Missed It
UBS Group AG and Credit Suisse Group AG are opposed to a forced combination, even as scenario planning for a government-orchestrated tie-up continues, people with knowledge of the matter told Bloomberg. UBS would prefer to focus on its own wealth-centric standalone strategy and is reluctant to take on risks related to Credit Suisse, whereas its smaller rival is seeking time to see through its turnaround after winning a liquidity backstop from the central bank, they said.
Looking Ahead
The Bank of England is set to raise the key lending rate for the eleventh consecutive time next week. Analysts expect another quarter-point hike, according to a consensus estimate compiled by Bloomberg, which would bring the interest rate to 4.25%, the highest level since 2008.
On Thursday, the European Central Bank went ahead with a planned half-point increase in interest rates but offered few clues on what may follow amid market turmoil that roiled Credit Suisse Group AG. The deposit rate was lifted to 3%, as officials have been flagging since their last meeting six weeks ago and most economists anticipated. It’s “not possible to determine at this point in time” the future path for rates, the ECB President Christine Lagarde told reporters in Frankfurt.
For a more considered take on the UK’s economic and financial news, sign up to Money Distilled with John Stepek.
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