Jeremy Hunt says Britain can now compete with the US and Asia's financial centres after he unveiled the biggest loosening of City regulations in a generation.
The Chancellor denied that it is reckless to be relaxing financial regulations that were put in place after the global financial crisis in 2008.
Billed as the biggest shake-up since Margaret Thatcher's wave of deregulation in the 1980s, the Chancellor's proposals - published today - include a relaxation of rules on what banks can do with their money; a new requirement for regulators to make London more competitive internationally; and scrapping red tape that holds back the stock market.
As he launched the reforms in Edinburgh, he told broadcasters he wanted to make sure banks "can compete with other financial centres, whether it's the United States or Asia" adding that "Scotland is in a fantastic place to do that. That's why these reforms will make a big difference".
Asked whether he is effectively sowing the seeds of the next financial crash, the Chancellor told broadcasters in Edinburgh: "No, because we have learned the lessons of that crash, we put in place some very important guardrails, which will remain.
"But the banks have become much healthier financially since 2008. We put in place a process so that financial issues can be resolved, which we didn't have before."
Read the latest updates below.
And that's it for today
That's a wrap for today's Telegraph business news. Before you go, here's today's top stories:
Starmer returns to 1997 as Labour launches 'Prawn Cocktail Offensive 2.0' - Tom Rees
Hunt's post-Brexit reforms must stretch far wider than a 'Big Bang' for the City - Matthew Lynn
BBC appoints private equity veteran as end of licence fee looms - James Warrington
How rail strikes threaten the Christmas dinner - Matt Oliver and Oliver Gill
Elon Musk in sexism row as ex-Twitter staff say women were targeted in layoffs - Matthew Field
Argo Blockchain shares suspended from trading
Shares in Argo Blockchain Plc were temporarily suspended from trading by the Financial Conduct Authority after the Bitcoin mining company disclosed a November decline in revenue.
The London-based company's stock has fallen 92pc since January.
In October, the company, which operates computer server farms that generate Bitcoin, was warned that it could be forced to shut down after a £22m share sale appeared to have collapsed, Bloomberg reported.
Argo could not immediately be reached for comment. This morning the company issued a trading update that made no reference to its shares being suspended.
The update revealed that during November it made a £1.4m loss, making just £848,000 from selling its mined Bitcoins.
The FCA has been asked for comment.
Juul pays $1.2bn to settle 10,000 US lawsuits over youth vaping
Juul has agreed to pay $1.2bn to resolve around 10,000 US lawsuits claiming it deliberately targeted children for its vaping products.
|The full amount of the settlement was not publicly known until today, Bloomberg reported.
"As part of the settlement and court process, Juul Labs cannot disclose the settlement amount at this time, but has secured an equity investment to fund the resolution," it said earlier this week.
Earlier this year Juul paid $438m to settle lawsuits brought against it by 34 US states who claimed it was deliberately targeting underage consumers.
The company has denied doing so and made no admission of liability today.
Netherlands to build two new nuclear power stations
Dutch prime minister Mark Rutte has announced plans to build two new nuclear power stations in the southern Netherlands.
The chosen site is near the village of Borssele, around 30 miles north-west of Antwerp.
"By adding nuclear energy to our total energy mix, we'll reduce carbon dioxide emissions from electricity production and make ourselves less dependent on countries where these fossil fuels come from," Rutte said today.
The two new reactors are expected to come online in 2035, he added.
Good evening all, this is Gareth Corfield on the controls for the final few hours of this increasingly chilly Friday.
That's all from me today. Gareth Corfield will take you through to the weekend.
Wall Street bounces back after inflation data
Wall Street's main indexes slipped today as a higher-than-expected rise in monthly producer prices fanned fears that the Federal Reserve could stick to aggressive interest rate hikes for longer.
Producer prices climbed 7.4pc last month on an annual basis, the Labor Department's report showed, compared with economists' expectations of a 7.2pc increase. The rise was, however, lower than the 8pc in October.
The Dow Jones Industrial Average is flat, while the S&P 500 has risen 0.3pc to 3,974.90. The Nasdaq Composite is up 0.5pc to 11,133.29.
Most mega-cap technology and growth stocks such as Alphabet, Nvidia, Tesla and Amazon were mixed.
Netflix gained 4.5pc after Wells Fargo upgraded the streaming giant's stock to "overweight" from "equal weight", while Carvana dropped 8pc after Jefferies halved the price target for the used-car retailer's stock.
Broadcom inched up 3.6pc after the chipmaker forecast current-quarter revenue above Wall Street estimates.
Boeing Co gained 1.6pc on a report of plans to announce a deal with United Airlines for orders of 787 Dreamliner next week.
Hunt denies it is reckless to relax financial regulations
Jeremy Hunt has denied that it is reckless to be relaxing financial regulations.
Asked whether he is effectively sowing the seeds of the next financial crash, the Chancellor told broadcasters in Edinburgh:
How rail strikes threaten the Christmas dinner
Trains loaded with goods destined for supermarket shelves face "real disruption" in the run up to Christmas.
Matt Oliver and Oliver Gill explain why:
Read how it could affect your Christmas dinner.
Elon Musk in sexism row as ex-Twitter staff say women were targeted in layoffs
Two women have sued Twitter for sex discrimination during sweeping layoffs of thousands of staff orchestrated by billionaire owner Elon Musk.
Senior technology reporter Matthew Field has the latest:
Read what has been alleged.
Inflation data sends Wall Street downward
It was a weak start on Wall Street as data showing persistently high inflation bolstered speculation the Federal Reserve will keep its monetary policy tighter for longer.
The Dow Jones Industrial Average has slipped 0.2pc, while the broad-based S&P 500 is also down 0.2pc to 3,954.53.
The tech-focused Nasdaq Composite has fallen 0.5pc to 11,028.90.
Oil rises as Putin says Russia may cut production after G7 price cap
The price of oil spiked after Vladimir Putin said Russia may cut production in response to the G7 cap on the price of its crude.
Brent crude, the international benchmark, was up as much as 1.6pc above $77 a barrel, while West Texas Intermediate (WTI) futures climbed above $72 today, rising as much as 2pc.
President Putin said a decision on Russia's response to the price cap will be made in the next several days, according to comments broadcast on state television.
The oil market still down about 9pc this week. The market is facing a persistent lack of liquidity that has left prices prone to large swings, and price volatility has deepened after US inflation data was stronger than expected.
Prices of a barrel of Brent and WTI have settled since Putin's intervention, both up about 0.3pc.
Freezing postal workers gather in Royal Mail protests
Thousands of Royal Mail workers have gathered outside Parliament in central London to mark another strike in the increasingly bitter dispute over jobs, pay and conditions.
Many among the animated crowd are wearing pink hi-vis vests, waving flags and holding placards that read "strike to win" and "save our Royal Mail".
The air is filled with loud music, whistles and colourful flares.
The Communication Workers Union (CWU) was expecting more than 15,000 members to attend the rally, describing it as the biggest postal workers' demonstration in living memory.
Union boss Dave Ward told PA: "They're fighting for their jobs, their livelihood, and the service that they provide to the public."
US producer prices rise higher than expected
US producer prices increased slightly more than expected in November, raising the prospect that the Federal Reserve will continue its aggressive pace of interest rate increases next week.
The producer price index for final demand rose 0.3pc last month, the Labor Department said, while data for October was revised higher to show the PPI gaining 0.3pc instead of 0.2pc as previously reported.
However, the underlying trend in inflation is moderating. In the 12 months to November, the PPI increased 7.4pc after advancing 8.1pc in October.
The report came ahead of the Fed's policy meeting next Tuesday and Wednesday.
Fed Chair Jerome Powell said last month that the US central bank could scale back the pace of its interest rate rises "as soon as December."
The Fed is in the midst of the fastest rate-hiking cycle since the 1980s.
Unravelling ring-fencing a 'huge mistake', says former Bank economist
Sir John Vickers, the economist who led a major review of the UK's banking industry after the financial crash, said "unravelling" the ring-fencing regime on Britain's banks would be a "huge mistake".
The former chief economist at the Bank of England told BBC Radio 4's World at One programme:
Penguin Random House boss to step down after merger scrapped
Penguin Random House head Markus Dohle will step down at the end of the year after a US judge blocked a planned $2.2bn (£1.8bn) merger of the world's largest publisher and rival Simon & Schuster.
Dohle had resigned "at his own request and on the best of mutual terms", the company added in the statement.
Nihar Malaviya, who is currently president and chief operating officer of Penguin Random House US, will take over as interim chief executive from Jan 1.
Bertelsmann, the German media group that owns Penguin, initially said it would appeal a US judge's decision but then decided to scrap the deal after discussions with Paramount Global, Simon & Schuster's owner.
Car dealer takeover collapses
The £400m takeover of Britain's second biggest car dealer has collapsed after a Swedish tycoon failed to secure financing for his swoop.
Chief business correspondent Oliver Gill has the details:
What the City's 'Big Bang 2.0' means for your money
Chancellor Jeremy Hunt has unveiled new proposals today that will tear up "overbearing" EU legislation, in a move that the Government hopes will boost the British financial services industry.
Mr Hunt has targeted old European rules ranging from pensions to investment funds.
Lauren Almeida breaks down how the proposals could affect you and your savings.
Royal Mail workers gather outside Parliament
Thousands of Royal Mail workers have rallied today for another strike in the increasingly bitter dispute over jobs, pay and conditions.
Members of the Communication Workers Union (CWU) gathered outside Parliament, with little sign the long running row will be resolved soon.
The union said at least 15,000 will have attended the rally, describing it as the biggest postal workers' demonstration in living memory.
Strikes are also planned on Sunday and next Wednesday and Thursday.
Royal Mail workers join nurses, paramedics, rail workers and Border Force officials in walkouts over jobs, pay and conditions this month.
Rishi Sunak said today he is not ruling out extending "tough" new anti-strike laws to prevent walkouts by emergency service workers such as nurses.
US markets expected begin day higher
Wall Street is poised to open higher before a report on US producer prices that will be one of the final sets of data to inform a rate decision by the Federal Reserve next week.
US equity futures moved upwards, with contracts on the S&P 500 adding 0.4pc after the underlying benchmark notched its first advance this month.
Investors are taking heart from any signs of softness in prices that may allow policymakers around the world to be less hawkish and more supportive of growth.
Hunt aims to tackle problems holding back British productivity
The Chancellor has said he is confident about Britain's long term prospects, adding there is a "robustness" underlying the UK's economy.
Jeremy Hunt is speaking after announcing his so called "Edinburgh Reforms", aimed at taking advantage of regulatory freedoms after Brexit and securing London's place as Europe's financial capital.
He told the Financial Times's Global Boardroom event that the wrong choices now could affect the UK's outlook for inflation. He said:
Turning to strike action sweeping the country, he added: "We have to be really careful not to agree to pay demands that lock in high inflation."
City reforms contain some surprises
Jeremy Hunt's 30-point plan to boost the City of London contains some surprises as well as measures that were already expected.
Banking & financial services correspondent Simon Foy has this latest analysis:
Tesla 'to suspend Model Y output in Shanghai in last week of Dec'
Tesla will suspend production of its Model Y at its Shanghai plant between Christmas and New Year, an internal memo has revealed.
The suspension of assembly at the end of the month would be part of a cut in planned production of about 30pc in the month for the Model Y, Tesla's best-selling model, at the Shanghai factory, sources told Reuters.
The Shanghai factory, the most important manufacturing hub for Elon Musk's electric vehicle company, kept normal operations during the last week of December last year.
Tesla did not immediately respond to a request for comment.
Tesla is targeting production of just over 20,000 Model Y vehicles for the last three weeks of December combined, including the week of suspended output, according to the memo.
Twitter to tell users if they were 'shadowbanned'
Twitter owner Elon Musk continued his a shake-up of the platform as he said the company will begin telling users if their posts have been suppressed and give them an avenue to appeal.
The announcement followed a Twitter thread by journalist Bari Weiss, who has been granted access to company documents.
She said that conservative commentators had their tweets downplayed by employees - a process known as "shadowbanning".
She and writer Matt Taibbi have been publishing findings from the trove of documents in a series they have called "The Twitter Files" - with Mr Musk cheering them on.
Mr Musk tweeted: "Twitter is working on a software update that will show your true account status.
"So you know clearly if you've been shadowbanned, the reason why and how to appeal."
Markets up after Hunt's financial reforms revealed
The FTSE 100 has edged higher as financial stocks rose following the Government's overhaul of regulations on the sector in a bid to maintain the City of London as one of the most competitive financial hubs in the world.
The blue chip index and the domestically-focused FTSE 250 were up 0.1pc each, although they are on track to end the week lower.
The investment banking and brokerage services index rose 0.6pc and banks 0.2pc after Jeremy Hunt set out 30 measures to overhaul the financial sector, including a repeal of "burdensome" EU rules the government says will unlock investments.
Energy stocks fell 1.2pc and were the biggest drag on the main index due to subdued crude prices.
Among stocks, Man Group jumped 6.4pc after the investment management firm announced a share buyback programme of up to $125m (£102m).
Financial regulation remains 'robust', insists Sunak
Rishi Sunak has insisted that regulation of the financial services sector remains "robust" despite the relaxation of banking safeguards introduced after the 2008 financial crisis.
Asked if he was being reckless in relaxing rules on investment banks, the Prime Minister told broadcasters during a visit to RAF Coningsby in Lincolnshire:
Primark on target to open 10 stores by Christmas
Primark will open 10 new shops before Christmas as it continues with its expansion plan, the budget fashion retailer's owner Associated British Foods (ABF) said.
The announcement comes after ABF held firm on its trading guidance for the year ahead of its annual general meeting today.
Michael McLintock, chairman of the business, maintained its forecasts despite warning the company expects "further significant input cost inflation" over the current financial year.
However, the firm said cost volatility has "diminished" since its previous update.
ABF told shareholders that trading at Primark so far this financial year has been "encouraging" despite increased pressure on household budgets.
It said Primark is "on track" to open 27 new shop this financial year, with 10 to open in the run up to Christmas.
Pound broadly flat as finance reforms unveiled
The pound has risen only slightly against the dollar as traders our over the details of the Chancellor's major reforms of the financial sector.
Sterling was up 0.1pc against the greenback to $1.22, not far off Monday's six-month high of $1.23. It also against some ground against the euro, which is worth 86p.
Currency movements have also been limited by jitters about the health of the US economy, and ahead of producer inflation data later today and a Federal Reserve meeting on interest rates next week.
Public expect higher inflation, Bank survey shows
The British public's expectations for inflation over the medium term edged up last month, although expectations for the year ahead dipped, according to a quarterly Bank of England survey.
The public's expectation for inflation in the next one to two years rose to 3.4pc in November from 3.2pc in August, matching a May reading which was the highest since November 2013.
Expectations for inflation over the coming year time dropped to 4.8pc from 4.9pc in August, while those for five years' time rose to 3.3pc in November from 3.1pc.
Financial reforms 'bring equal opportunities allowing for competition'
Jeremy Hunt's financial sector reforms have been welcomed by a challenger to the London Stock Exchange.
Alasdair Haynes, chief executive of Aquis Exchange, said the announcement "promotes competitiveness and growth". He said:
Porvair shares rise after beating forecasts
Laboratory instrument manufacturer Porvair saw its share price rise as much as 11pc after announcing improved sales forecasts for the year.
Analysts at Peel Hunt upgraded their recommendation to "buy" after the filtration specialist said it expects revenues to be up 18pc for the year to the end of November.
Pre-tax profits are expected to be around £18.1m, ahead of predictions of about £13.9m.
Markets digest Hunt's post-Brexit City reforms
The FTSE 100 has lost ground slightly as traders digest the Chancellor's post-Brexit reforms of the City.
The blue-chip index has fallen 0.1pc to 7,466.55, with Prudential doing its best to lift the market with a 1.7pc gain. Ocado has enjoyed the largest increase at 2.6pc.
Oil producers are dragging down the market, with Shell pulling downward the most and BP the biggest faller, down 1.7pc.
Among the midcaps, investment manager Man Group has enjoyed the most gains on the FTSE 250, rising 5.8pc.
It has helped the market to a 0.1pc gain to 18,832.63.
Credit Suisse fundraising boosts European shares
European shares rose this morning as industrial and financial stocks gained on optimism over China relaxing Covid curbs, while Credit Suisse climbed on news of a capital raise.
The continent-wide STOXX 600 index was up 0.2pc.
Industrial stocks including Airbus were among the biggest boosts to the STOXX 600, while the financial services sector rose as shares of Credit Suisse rebounded further from record lows hit last week.
Credit Suisse shares rose 3pc after the embattled bank hailed a "milestone" in its turnaround plan, after raising 2.2bn Swiss francs (£2bn) as part of a 4 billion franc cash call.
Despite early gains, the STOXX 600 is still likely to log losses this week after seven straight weekly gains.
Christmas Eve services to end at lunchtime, rail passengers warned
Passengers are being warned not to travel by rail after lunchtime on Christmas Eve to avoid being stranded on Dec 25.
Chief business correspondent Oliver Gill has the latest:
See a calendar showing all the strike action affecting Britain.
Berkeley in 'good position' to weather housing market turmoil
House builder Berkeley is "in a good position to navigate these tougher times", according to analysts, despite announcing pre-tax profits were down 2pc to £284.8m.
Sales since the end of September are around 25pc lower than they were for the first five months of the financial year, although prices have remained firm. The FTSE 100 house builder's shares were up 0.3pc in early trading.
It comes as house prices fell by 2.3pc in November, marking the biggest monthly drop since 2008, according to Halifax.
Charlie Huggins, head of equities at Wealth Club, said:
Berkeley warns weakened planning reforms will 'lower investment'
Berkeley has warned the Government that the pace of new housebuilding will slow as a result of the watering down of planning reforms.
The Prime Minister dropped plans this week to impose mandatory housebuilding targets on local councils and Levelling Up Secretary Michael Gove said the government will consult on how housing goals can "better take account of local density".
The Levelling Up and Regeneration Bill is progressing through Parliament with a number of amendments designed to fend off rebellions.
Berkeley chief executive Rob Perrins said:
Despite the uncertainty, Berkeley says it remains on track to deliver full-year pre-tax earnings of £600m for the year ending April 30.
Reforms will 'turbocharge' growth across UK, says Hunt
Chancellor Jeremy Hunt said the so-called "Edinburgh Reforms" will seize on "Brexit freedoms" to overhaul banking rules.
They include a package of more than 30 regulatory reforms which he claims will "turbocharge" growth in towns and cities across the UK.
The moves will loosen banking rules introduced after the 2008 financial crisis, which saw some UK banks face potential collapse.
Today the Chancellor revealed the shake-up will include a commitment to make "substantial legislative progress" on repealing and replacing the Solvency II directive next year, which is expected to unlock more than £100bn of private investment, according to the Treasury.
He also promised to reform the UK prospectus regime to support stock market listings and capital raises, reforming rules on real estate investment trusts and reviewing provisions on investment research in the UK.
The financial reforms announced: At a glance, part 2
Here are more of the financial services reforms announced today by the Chancellor:
- Overhauling the UK's regulation of prospectuses
- Committing to establish the independent Investment Research Review
- Committing to having a regime for a UK consolidated tape in place by 2024
- Consulting on reform to the VAT treatment of fund management
- Consulting in Q1 2023 on bringing Environmental, Social, and Governance (ESG) ratings providers into the regulatory perimeter
- Consulting on a UK retail central bank digital currency alongside the Bank of England in the coming weeks
- Publishing a response to the consultation on expanding the investment manager exemption to include cryptoassets
- Laying regulations in early 2023 to remove well-designed performance fees from the pensions regulatory charge cap
The financial reforms announced: At a glance
The Chancellor has set out plans to overhaul the financial sector including a review of rules to make bankers accountable for their decisions and easing capital requirements on smaller lenders.
Here are some of the measures announced under Jeremy Hunt's reforms of the financial sector:
- Reforming the ring-fencing regime for banks
- Issuing a new remit letters for the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) with clear, targeted recommendations on growth and international competitiveness
- Reforming securitisation regulation
- Launching a call for evidence on reforming the short selling regulation
- Welcoming the PRA consultation on removing rules for the capital deduction of certain non-performing exposures held by banks
UK markets up as reforms announced
The markets have reacted positively after the announcment of the Chancellor's easing of regulations affecting Britain's financial sector.
The blue-chip FTSE 100 began the day 0.4pc higher at 7,498.02, while the mid-cap FTSE 250 opened up 0.3pc to 18,879.98.
European gas prices swing lower despite freezing temperatures
The Met Office said temperatures would be "falling close to minus 10C" in rural parts last night - but for now the cold snap has not affected gas prices.
Benchmark futures for European natural gas prices have declined as much as 3.5pc today even as unseasonably cold weather grips the continent.
Dutch front-month futures, the benchmark for Europe, was 2.4pc lower €135.57 per megawatt hour a short time ago.
Hunt's reforms to make UK 'world's most innovative and competitive global financial centre'
As the Government published a raft of consultation documents this morning on its reforms to the City, the Treasury said:
Santander fined £107m for anti-money laundering failures
Santander UK has been fined £107.8m over "serious and persistent gaps" in its anti-money laundering controls, the Financial Conduct Authority (FCA) has announced.
The Financial Conduct Authority said in a statement this morning that the bank had fully cooperated with its probe and accepted the watchdog's findings that there had been repeated anti-money laundering failings between 2012 and and 2017.
Mark Steward, the FCA's executive director of enforcement and market oversight, said: "Santander's poor management of their anti-money laundering systems and their inadequate attempts to address the problems created a prolonged and severe risk of money laundering and financial crime."
The fine is the latest example of a concerted effort by the regulator to act more forcefully. It has previously fined HSBC, Standard Chartered and NatWest a combined £431m for poor management of their anti-money laundering systems.
Santander UK chief executive Mike Regnier said:
Post-Brexit City reforms 'not a regulatory race to the bottom'
Jeremy Hunt's plans to tear up EU regulations on Britain's financial sector are "not a regulatory race to the bottom", City chiefs have insisted.
The Chancellor will today in Edinburgh announce a package of reforms aimed at increasing the City of London's competitiveness by relaxing ring-fencing rules on smaller banks and mandating financial regulators to focus on economic growth as well as consumer protection.
Chris Hayward, policy chairman of the City of London Corporation, said the reforms are "not about deregulation".
He told BBC Radio 4's Today programme:
Jeremy Hunt's reform package for Britain's financial sector are expected to be less radical than previously anticipated, with the Chancellor abandoning the use of the term "Big Bang 2.0" in favour of the "Edinburgh Reforms".
City of London Corporation's policy chairman Chris Hayward was, nevertheless, enthusiastic.
He told BBC Radio 4's Today programme:
Jeremy Hunt is to tear up hundreds of pages of "overbearing" EU legislation in a bid to boost Britain's financial services industry after Brexit.
Finance chiefs have insisted that the deregulation is "not regulatory a race to the bottom" and is about having "good growth and good regulation at the same time".
Chris Hayward, policy chairman of the City of London Corporation, said the reforms were "not a regulatory race to the bottom".
5 things to start your day
1) National Grid on standby to pay households to cut energy usage - Grid operator warns of implementing 'enhanced actions' amid looming supply squeeze
2) Hunt to tear up 'overbearing' EU rules to boost City post-Brexit - Reform package comes as businesses warn Chancellor's tax raid has had a 'chilling effect' on the economy
3) Rail strikes could last 'indefinitely', warns Mick Lynch - Industrial action to continue unless ministers drop calls to remove guards from trains
4) Why Britain is using its special relationship with the US to boost gas supplies - Import deal to end dependence on Russian energy 'once and for all'
5) UK must cut economic reliance on China, says Labour - Russia's invasion of Ukraine is a 'wake-up call' for UK's economic resilience
What happened overnight
Asian stocks climbed after US shares posted their first advance this month, with traders focused on upcoming inflation figures in the US for clues on the path of interest rate hikes.
A benchmark of Asia equities headed for a sixth weekly gain, the longest such stretch in two years.
Hong Kong stocks opened slightly higher, the Hang Seng Index inching up 0.17pc to 19,484.23.
Meanwhile, the Shanghai Composite Index was flat, declining 0.23 points to 3,197.12, while the Shenzhen Composite Index on China's second exchange barely moved, edging up 0.34 points to 2,064.72.
Tokyo stocks opened higher on Friday, with the benchmark Nikkei 225 index up 0.47pc in early trade, while the broader Topix index gained 0.55pc, sitting at 1,952.16.