Connect with us

News

Sir Keir Starmer Appoints Lord Mandelson as UK Ambassador to the US

Published

on

Sir Keir Starmer is set to appoint Lord Mandelson as the United Kingdom’s next ambassador to the United States, marking the first political appointment to the role in nearly 50 years. This move is seen as a strategic decision aimed at strengthening UK-US relations, especially during a period of uncertainty with the incoming Trump administration.

Lord Mandelson, a seasoned Labour figure and former Business Secretary, has extensive experience in trade and diplomacy, notably serving as the EU’s Trade Commissioner under Tony Blair. His appointment, expected to be confirmed soon, comes at a time when tensions between the UK and US are rising. Incoming President Donald Trump has threatened to impose sweeping tariffs on foreign imports, potentially complicating trade relations between the two countries.

With Trump’s allies suggesting that the UK may have to choose between aligning with the US or the European Union, Sir Keir has dismissed this binary choice. “We must find a way to have our cake and eat it,” Mandelson remarked previously, stressing the need for Britain to navigate its ties with both the EU and the US without being forced into an either/or situation.

Mandelson’s political comeback is notable, having not held a government position since 2007. His close ties to Starmer’s chief of staff, Morgan McSweeney, and support from Foreign Secretary David Lammy, have made him a strong contender for the role. One source described his appointment as a sign of how seriously Starmer takes UK-US relations, particularly as the UK braces for potential economic fallout from Trump’s proposed tariffs.

The current UK ambassador to the US, Dame Karen Pierce, will remain in her post until the end of January when Trump is inaugurated. Pierce, who has established significant Republican contacts, played a key role in facilitating a meeting between Trump, Starmer, and Lammy in November.

Mandelson’s appointment follows speculation about potential candidates for the role, including David Miliband and Baroness Amos. Sir Keir is eager to build strong ties with the Trump administration, with McSweeney recently meeting with key Trump strategist Susie Wiles in the US.

However, tensions persist, particularly following accusations during the US election campaign that Labour had interfered in the race. Despite these disagreements, Trump has expressed admiration for Starmer, calling him a “very nice guy” who was “very popular” ahead of the election.

With Brexit and Trump’s tariff threats looming large, Mandelson’s diplomatic skills will be crucial in ensuring the UK’s interests are well-represented in Washington. The EU is expected to retaliate with its own trade measures if tariffs are imposed, but experts suggest the UK’s resilience may lie in its export of services, which make up two-thirds of its £188 billion annual exports to the US. By appointing Mandelson, Starmer signals a commitment to navigating the complexities of global trade with expertise and diplomacy.

News

UK Car Manufacturing Sees Sharp Decline in November, Hits Lowest Levels Since 1980

Published

on

By

UK car manufacturing experienced a dramatic drop in November, with production falling nearly a third compared to the same month last year. New figures from the Society of Motor Manufacturers and Traders (SMMT) revealed that just 64,216 cars were produced in November 2024, marking a 27,711-unit decline from November 2023. This represents the ninth consecutive monthly decline, reaching the lowest output for November since 1980.

Of the cars produced, fewer than a third (19,165) were either battery electric or hybrid vehicles, with the sector recording a sharp 45.5% year-on-year slump. The overall decline in production mirrors the challenges the UK automotive industry faced in the early 1980s, a period marked by industrial unrest and the dominance of Ford models such as the Escort Mk3, Sierra, and Cortina.

The SMMT’s chief executive, Mike Hawes, acknowledged that while some decline was expected due to ongoing transformations at many plants, manufacturers are facing significant pressures both domestically and internationally. “Billions of pounds are being poured into new technologies, models, and production tooling, but the challenges are formidable,” Hawes said.

The data highlights a growing imbalance in demand. Output for the domestic market fell by more than half, while export production shrank by 21.3%. The total car production for the year so far stands at approximately 734,500 vehicles, a reduction of 108,790 compared to the same point in 2023, and only half of the 2019 levels.

The situation has been exacerbated by recent policy decisions. Stellantis, the parent company of Vauxhall, has announced the closure of its van-making plant in Luton, putting up to 1,100 jobs at risk. Stellantis has partly blamed the closure on the UK’s stringent zero-emission vehicle (ZEV) sales targets, which require manufacturers to meet ambitious annual goals or face substantial fines.

Business Secretary Jonathan Reynolds has acknowledged the industry’s concerns and pledged to review the ZEV mandate, with a government response expected in January. The SMMT has called for swift action, emphasizing the need for incentives to stimulate the domestic electric vehicle market, increased investment in charging infrastructure, and a clearer industrial and trade strategy.

The industry body stressed that immediate and decisive action is necessary to secure the future of the UK automotive sector. “Connecting a thriving local market with robust local production is essential for the sector’s revival,” the SMMT said.

As the UK car industry grapples with technological shifts, changing consumer behavior, and ongoing policy uncertainty, November’s figures underscore the turbulence reshaping the sector.

Continue Reading

News

UK Economy Faces Stagnation as Tax Hikes Hit Business Confidence, Warns Bank of England

Published

on

By

The Bank of England has warned that the UK economy is likely to see no growth following the Chancellor’s recent Budget, as businesses react to record tax increases by raising prices and reducing staffing levels. Policymakers now expect the economy to flatline in the final quarter of 2024, a downgrade from their earlier forecast of 0.3% growth. This follows concerning figures that showed a contraction in output in October, raising fears of a looming recession.

While the Bank’s Monetary Policy Committee (MPC) voted to keep interest rates at 4.75% on Thursday, Governor Andrew Bailey acknowledged the uncertain outlook. He stressed that the Bank cannot commit to future rate cuts at this stage due to ongoing uncertainties stemming from the Budget’s measures.

Analysts have cautioned that both households and businesses may face continued cost pressures into 2025, with inflation remaining persistent despite subdued economic growth. A recent Bank of England survey found that an increasing number of households expect economic stagnation to become the norm. “There was a common view that the UK was moving from a cost-of-living crisis to a prolonged period of higher costs and lower living standards,” the report stated.

Businesses have reacted to the Chancellor’s decision to raise employers’ National Insurance contributions by £25bn, a move that is expected to keep inflation elevated for longer. Many companies have opted to increase prices instead of reducing wages, while also scaling back on recruitment and working hours to cope with rising costs.

Prime Minister Rishi Sunak acknowledged that improving living standards “will take some time” and “won’t be fixed by Christmas.” Chancellor Jeremy Hunt defended the Government’s approach, claiming that low-income families are already feeling the benefits of recent measures. However, the Bank’s survey painted a more cautious picture, with many households feeling that official commentary on economic recovery did not align with their lived experience of high day-to-day costs.

The Bank of England noted that the National Insurance hike is “weighing heavily on sentiment” among businesses, dampening their optimism about a swift economic recovery. Consumer concerns have also extended to the housing market, where the Bank observed that many buyers are now reluctant to make significant financial commitments.

Economists at Citi warned that price increases planned for next year could keep inflation stubbornly high, while analysts at HSBC suggested that the UK could be drifting towards stagflation, justifying higher interest rates even if growth slows and unemployment rises.

Minutes from the MPC’s latest meeting revealed differing views among policymakers on the long-term effects of the Budget. While three members supported an immediate rate cut, the majority, including Governor Bailey, remained cautious, noting that inflationary pressures are still too uncertain to allow a quick policy shift. Market expectations are now leaning towards a possible rate cut in February, although Mr. Bailey emphasized that any reduction in borrowing costs would be gradual to ensure the 2% inflation target is met.

Businesses have expressed surprise at the scale of the National Insurance rise, particularly the reduction in the threshold at which employers must start paying. Many expect the increase to drive up labour costs, especially in sectors that rely on part-time or lower-paid staff. In response, some companies are considering investing in automation or relocating operations abroad to mitigate rising costs and maintain competitiveness.

Continue Reading

News

FCA Extends Deadline for Motor Finance Complaints Amid Expanded Scope

Published

on

By

Lenders in the UK’s motor finance market have been granted additional time to address an expected surge in complaints following a significant expansion of the complaints process by the Financial Conduct Authority (FCA). The FCA has set a new deadline of December 4, 2025, for lenders to respond to customer grievances related to commission arrangements, including both discretionary and non-discretionary commissions. Importantly, this move extends the complaints process to cover not only traditional car finance credit agreements but also car leasing deals.

The change comes after a landmark ruling by the Court of Appeal in October, which declared that car dealers receiving commission from lenders without customers’ informed consent was unlawful. This decision expands the scope of potential claims, as it applies to all commission payments not properly disclosed, including those related to both traditional car loans and leasing agreements.

Previously, the focus had been on discretionary commissions linked to the interest rates on finance agreements, a practice that was banned in 2021. However, the Court of Appeal’s ruling, which does not directly address leasing, has prompted the FCA to include leasing agreements within the complaints process, ensuring that consumers using similar products receive consistent protection and redress.

The FCA had signalled its intent to investigate discretionary commission arrangements in motor finance earlier in 2023. These arrangements allowed dealers to earn commissions based on the interest rates they charged customers, potentially leading to higher borrowing costs. While such commissions were banned in 2021, loans made prior to that date remain under scrutiny, with around 14.6 million affected agreements in total.

The expanded scope of the ruling could impact up to 11.3 million additional loans and leasing agreements, increasing the number of consumers potentially eligible for compensation. The credit rating agency Moody’s has estimated that redress costs could reach as much as £30 billion if the ruling is upheld by the Supreme Court, a figure that would rival the notorious payment protection insurance (PPI) scandal, which cost UK financial institutions around £50 billion in compensation.

Although large banks such as Lloyds, Barclays, and Santander UK may have the financial strength to absorb these costs, smaller and more specialised lenders, including Close Brothers, Aldermore, and car manufacturers’ captive finance arms like Ford and Volkswagen, may face more significant financial challenges.

The FCA’s extension of the deadline and inclusion of leasing agreements aims to provide consumers with a clear and consistent path to redress, while giving lenders time to adjust. With the Supreme Court’s appeal still pending, the motor finance sector is bracing for a wave of claims and potential further clarifications from regulators.

Continue Reading

Trending