Among the changes are requirements for Defined Contribution (DC) pension funds to publicly disclose how much they invest in the UK.
According to the Treasury, this will allow employers and savers to compare pension schemes and make a better informed choice.
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New pension fund reforms are expected to benefit savers
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As part of the Value for Money (VFM) pension fund reforms, there will be greater consolidation within the DC pension market and improved outcomes for savers.
Under the Government’s auto enrolment rollout, the amount of investment entering UK pension funds has jumped £90billion in 2012 to around £116billion in 2022.
Despite this, existing disclosure requirements for DC pension funds are not consistent across the market and do not demand a breakdown of UK investments.
As such, it is sometimes difficult for policymakers and savers to understand where this money is being invested.
With these reforms, DC pension funds will have to disclose investment levels in British businesses by 2027, including their costs and net investment returns.
Furthermore, pension funds will need to publicly compare their performance data against rival schemes, including at least two schemes managing at least £10billion in assets.
Any pension funds which are performing poorly for savers will not be permitted to take on new business from employers.
On top of this, The Pensions Regulator (TPR) and Financial Conduct Authority (FCA) are set to be awarded with new intervention powers.
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Mr Hunt said: “We have already started on a path to drive growth, unlock capital for our most promising companies and improve outcomes for savers – and these new rules mean employers and savers can see how their money is invested and how the returns compare to other schemes.
“British pension funds appear to contribute less to the UK economy than international counterparts do as they invest less in our domestic businesses. These requirements will help focus minds on how to improve overall returns and outcomes for savers.”
Mel Stride MP, Secretary of State for Work and Pensions, added: “The incredible success of automatic enrolment has opened up a huge opportunity to grow the economy, boost British businesses and fuel our futures. It has helped us transform the pensions landscape over the last decade.
“And our Value for Money framework will take this one step further, focusing pension managers on their number one priority – securing the best possible returns for savers – as well as providing a boost to the wider economy.”
Marks & Spencer has won the right to demloish one of its flagship London stores and replace it with office and retail space following a legal battle.
The retail giant wants to flatten and rebuild its Orchard House store near Marble Arch for a nine-storey building with a retail space, cafe, gym and office on site.
Levelling Up Secretary Michael Gove intervened to block the plans, arguing that the building should be refurbished rather than demolished.
He also said the demolition would negatively impact nearby heritage assets including the Grade-II-listed Selfridges store directly opposite.
But High Court Judge Mrs Justic Lieven ruled on Friday in favour of Marks & Spencer, issuing a damning judgement that the Government misunderstood planning policies and that Mr Gove had tried to 'rewrite' planning policy.
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M&S took action against the Government in the High Court over its 'unusual' decision to refuse permission.
Barristers for M&S told a hearing in London earlier in February that Mr Gove had 'misunderstood and misapplied' national planning policy when making his decision, which should be quashed.
The Government, which resisted the application with Westminster City Council and campaign group Save Britain's Heritage, said that Mr Gove was entitled to make the decision he did and had given clear reasoning.
Mrs Justice Lieven said: 'In my view, it is plain that the Secretary of State misinterpreted the national planning policy framework, and therefore erred in law.
'The Secretary of State relied on a meaning of the national planning policy framework which is simply not open to him.
'There is some encouragement for the reuse of buildings, but nothing that comes close to a presumption.
'The Secretary of State has not applied the policy, he has rewritten it.
'This then leads to him applying a test, or policy hurdle, through the rest of (his decision) which is based on his misinterpretation of the policy.'
Oxford Street has seen a major decline in recent years with empty stores and a boom in souvenir and American candy shops.
M&S applied to Westminster City Council in 2021 for permission to demolish Orchard House, its store in Oxford Street, and replace it with a nine-storey building including a gym, cafe, office and retail space.
The council and the Greater London Authority supported the plans, but Mr Gove said in June 2022 that he would decide on the application.
Despite a Government planning inspector also approving the plans in February 2023, Mr Gove refused planning permission last July.
He said there was no 'compelling justification' for demolition over refurbishment and that flattening the building would cause harm to nearby heritage assets, including the Grade II-listed Selfridges store directly opposite.
But he also acknowledged that it was unclear whether there was a 'viable and deliverable alternative'.
Russell Harris KC, representing M&S, told the court that national planning policy gave no more than a 'general positive encouragement' of refurbishing buildings, rather than a 'strong presumption' in favour of it as claimed by Mr Gove.
He added that Mr Gove had failed to consider that the Government planning inspector had found that 'meaningful refurbishment' was 'unlikely', and that blocking the plans would likely lead to the store closing and 'terminal' harm to the area.
Mrs Justice Lieven said that Mr Gove had not properly stated why he disagreed with his planning inspector, and 'fails to grapple with the implications' of refusing planning permission.
In her 31-page judgment, the judge also found that Mr Gove gave 'inadequate' reasoning for deciding that closing the M&S store would only cause 'limited' harm to London's West End.
She said: 'The inspector was finding significant harm from the loss of investment, and effectively the loss of a strong retail attraction at the western end of Oxford Street, beyond Selfridges.
'The Secretary of State disagrees and simply says he thinks the harm 'would be limited'. But he fails to explain why he reaches this conclusion.'
Following the decision, Sacha Berendji, M&S operations director, said: 'Today's judgment couldn't be clearer, the court has agreed with our arguments on five out of the six counts we brought forward and ruled that the Secretary of State's decision to block the redevelopment of our Marble Arch store was unlawful.
'The result has been a long, unnecessary and costly delay to the only retail-led regeneration on Oxford Street which would deliver one of London's greenest buildings, create thousands of new jobs and rejuvenate the capital's premier shopping district.
'The Secretary of State now has the power to unlock the wide-ranging benefits of this significant investment and send a clear message to UK and global business that the Government supports sustainable growth and the regeneration of our towns and cities.'
Interest rate cuts will remain “some way off” even if inflation falls below 2pc in the spring, the Bank of England’s chief economist has warned.
Huw Pill said policymakers must not feel a “false sense of security” if the inflation eases sharply in the near future from its present level of 4pc.
He said Britain’s economy remains weak but added that the evidence is not yet “conclusive” that price rises will not pick up again.
However, he indicated during a speech at Cardiff University that this will not mean interest rates have to stay at their 16-year highs of 5.25pc.
He said: “Maintaining restrictiveness does not necessarily mean leaving Bank Rate unchanged.”
His comments come after inflation soared to 41-year highs of 11.1pc in October 2022.
He added that although “we are now seeing early signs of a downward shift in the persistent component of inflation dynamics, those signs thus far remain tentative”.
Billionaire entrepreneur says Microsoft-backed company originally promised to make an open-source, non-profit company.
Elon Musk is suing OpenAI and its chief executive Sam Altman, alleging the start-up betrayed its original promise of working to benefit humanity when it forged a multibillion-dollar alliance with Microsoft.
The lawsuit filed in San Francisco on Thursday said Altman and OpenAI’s co-founder Greg Brockman had initially pledged to make an open-source, non-profit company, and that its pursuit of profit constituted a breach of contract.
The company had kept the design of GPT-4, its most advanced AI model, “a complete secret”, said Musk’s lawyers.
Musk co-founded OpenAI in 2015, but stepped down from its board in 2018. He also runs electric vehicle maker Tesla and rocket maker SpaceX, and bought Twitter for $44bn in October 2022.
Sam Altman, CEO of Microsoft-backed OpenAI and ChatGPT creator speaks during a talk at Tel Aviv University in Tel Aviv, Israel, on June 5, 2023 [Amir Cohen/Reuters]
Last year, entrepreneur Altman was fired by OpenAI’s former board which said it was trying to defend the company’s mission to develop AI that benefits humanity. A few days later, Altman returned to the company with a new initial board.
OpenAI is reportedly planning to appoint several new board members in March.
OpenAI’s chatbot, ChatGPT, became the fastest-growing software application in the world within six months of its launch in November 2022.
It also sparked the launch of rival chatbots from Microsoft, Alphabet and a bevvy of start-ups that tapped the hype to secure billions in funding.
House prices returned to growth for the first time in more than a year and are approaching their record high, according to a lender, as mortgage approvals surged.
Property values rose by 1.2pc in the 12 months to February, the Nationwide house price index showed.
Prices increased by 0.7pc between January and February, making the average home worth £260,420.
It comes as figures published by the Bank of England showed that mortgage approvals hit their highest in almost 18 months in January as lower borrowing costs tempted more buyers into the housing market.
More than 55,000 loans were approved for home purchase in the month, according to the Bank of England, the highest since October 2022, just before sales went into freefall amid financial turmoil in the wake of Liz Truss’s mini-Budget.
Nationwide’s chief economist Robert Gardner said: “House prices are now around 3pc below the all-time highs recorded in the summer of 2022, after taking account of seasonal effects.
“The decline in borrowing costs around the turn of the year appears to have prompted an uptick in the housing market.”
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
UK house prices have continued to recover from their slide last year, with prices rising on an annual basis for the first time in over a year last month.
Lender Nationwide has reported that UK house prices were 1.2% higher than a year ago in February, having jumped by 0.7% during the month – the same monthly rise as in January.
This lifted the average price to £260,420, up from £257,656 in January, Nationwide reports.
Nationwides’s data is based on mortgages approved by the lender, and doesn’t capture cash buyers. It does suggest that the drop in mortgage rates following the surge last year is helping to bring buyers back to the market.
Robert Gardner, Nationwide’s chief economist, says:
“The decline in borrowing costs around the turn of the year appears to have prompted an uptick in the housing market.
Indeed, industry data sources point to a noticeable increase in mortgage applications at the start of the year, while surveyors also reported a rise in new buyer enquiries.
Gardner adds that “the near-term prospects remain highly uncertain”, partly due to ongoing uncertainty about the future path of interest rates.
He says:
After falling sharply in late December, swap rates, which underpin fixed rate mortgage pricing, have drifted back up.
Nationwide reports that house prices are now around 3% below the all-time highs recorded in the summer of 2022, once seasonal effects are taking into account.
February’s rise in prices follows a 0.7% rise during January, according to Nationwide’s data, which left prices 0.2% lower than a year ago.
Yesterday, Bank of England data showed that new mortgage approvals rose in January to their highest level since October 2022, although new lending was still subdued in historic terms:
Zoopla has reported this week that activity in the housing market has picked up; they forecast sales will rise 10% this year.
Also coming up today
We round off the week with a flurry of economic data, including the latest eurozone inflation reading and Brazil’s growth report. Factory surveys from across the world are expected to confirm another drop in activity in the eurozone and the UK.
China’s manufacturing downturn has continued, with activity shrinking for a fifth straight month in February.
This puts more pressure on Beijing to deploy new stimulus measures to support its economy.
Stock markets in Japan, Australia and India have all hit record highs today, as the equities rally continues.
The agenda
9am GMT: Eurozone manufacturing PMI for January
9.30am GMT: UK manufacturing PMI for January
10am GMT: Eurozone flash inflation reading for February
10am GMT: Eurozone unemployment report for January
Noon GMT: Brazil’s GDP report for Q4 2023
2pm GMT: Bank of England’s chief economist Huw Pill: gives a speech at the Cardiff University Business School
3pm GMT: US manufacturing PMI for January
3pm GMT: University of Michigan’s index of US consumer confidence
Filters BETA
In the City, shares in broadcaster ITV have surged 14% after it announced the sale of its stake in the BritBox streaming service.
BBC Studios, ITV’s joint partner in the venture, is buying the 50% stake for £255m.
ITV says it is focusing on its advertiser-funded streaming service, ITVX; it plans to return the cash from the sale of its Britbox stake to investors through a share buyback.
Carolyn McCall, ITV’s CEO says:
“The sale of 50% of BritBox International means ITV is focused on its core strategic goals of continuing to build on ITVX’s success and growing ITV Studios.
I would like to thank the BritBox International team for making the company such a success and particularly CEO Reemah Sakaan for her leadership, drive and vision.”
News of the sale has sent ITV’s shares surging to the top of the leaderboard on the FTSE 250 index of medium-sized stocks.
BritBox was launched by the BBC and ITV in 2019, as a rival to streaming services such as Netflix, Amazon Video, and Sky’s Now TV. It offers a range of classic UK shows, from Downton Abbey and Love Island to Grange Hill and Captain Pugwash.
February’s pick-up in house prices bolsters the view that the correction in property values seen in late 2022 and part of last year has ended, says Martin Beck, chief economic advisor to the EY ITEM Club forecasting group.
Beck explains:
An improving economic outlook has helped. Falling inflation and still-strong pay growth mean real wages are rising again, unemployment is very low, consumer sentiment has picked up and quoted mortgage rates are up to 150 basis points lower than the peaks of summer 2023.
“These factors contributed to mortgage approvals in January increasing to a 15-month high [the Bank of England reported yesterday], while surveys of buyer and seller activity have also picked up.
Very high inward migration, along with a continued under-supply of new houses, are also supporting property values.
Karen Noye, mortgage expert at Quilter, points out that some lenders – including Nationwide – have recently been raising their mortgage rates.
They’ve been tracking the increase in borrowing costs in the market, she explains:
“The latest Nationwide house price index shows the housing market continued its positive start to the year in February, with annual house price growth up 1.2%, the first sign of positive annual growth since January 2023, while on a monthly basis prices rose 0.7%.
“Lower mortgage rates at the start of the year appear to have spurred some buyers back to the market which has buoyed prices, but more recently we have seen a further uptick in rates as swap rates have risen so this could be relatively short lived. Just last week, lenders including Nationwide, NatWest, Santander and HSBC all made the decision to increase their rates.
Hopes that the UK property market has “turned a corner” are creating momentum and lifting prices, says Jonathan Hopper, CEO ofGarrington Property Finders:
“It’s a bounceback, not a blip. Nationwide’s data shows house prices have risen in four out of the past five months, and the upward momentum is now so strong that prices have climbed 1.2% compared to this time last year.
“Crucially the market has also become more free-flowing. For sale signs are starting to sprout from homes across the country, and estate agents report a steady uptick in interest from both buyers and sellers.
“Two things are driving this resurgence in activity – mortgages have become more affordable and there’s a widespread sense that house prices have definitively turned a corner.
Tom Bill, head of UK residential research at Knight Frank, predicts average house prices will rise by 3% this year, as interest rates are cut.
Following this morning’s Nationwide house price data, Bill says:
“Buyers feel confident that the only way for the base rate is down, which has seen demand and house prices pick up in recent months. However, the upwards pressure on mortgage rates in recent weeks shows sellers the importance of getting the asking price right.
Banks are keen to lend and should eventually lower rates this year as inflation comes under control, which we believe will sustain positive annual growth in 2024 and see UK house prices increase by 3%.”
Jeremy Leaf, north London estate agent, reports that the housing market is still ‘price sensitive’ – meaning over-priced houses will struggle to sell:
“In our offices, more valuations, listings and viewings combined with fewer fall-throughs than this time last year are feeding through to agreed sales, mortgage approvals and exchanges.
“However, while Nationwide reports another rise in prices, the market does remain price sensitive. Only competitively-priced properties are attracting attention. Sellers must price realistically or offers won’t be forthcoming and market improvement may not be sustained.”
These charts from Nationwide show how annual house price inflation has pulled out of its slide last year, leaving prices 3% below the all-time highs:
A pick-up in borrowing costs could “restrain” the recovery in house prices, Nationwide adds.
Chief economist RobertGardner says:
“Borrowing costs remain well below the highs recorded last summer but, if the recent upward trend is sustained, it threatens to restrain the pace of any housing market recovery.
“While the squeeze on household budgets is easing, with wage growth now outstripping inflation by a healthy margin, it will take time to make up for the ground lost over the past few years, especially given consumer confidence remains fragile.”
The money markets have dialled back their expectations of interest rate cuts this year, which is why borrowing costs have been inching higher.
At the end of 2023, the City expected as many as six interest rate cuts in 2024, bringing Bank of England base rate down to 3.75%, from 5.25%. Now, though, fewer than three quarter-point rate cuts are expected.
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
UK house prices have continued to recover from their slide last year, with prices rising on an annual basis for the first time in over a year last month.
Lender Nationwide has reported that UK house prices were 1.2% higher than a year ago in February, having jumped by 0.7% during the month – the same monthly rise as in January.
This lifted the average price to £260,420, up from £257,656 in January, Nationwide reports.
Nationwides’s data is based on mortgages approved by the lender, and doesn’t capture cash buyers. It does suggest that the drop in mortgage rates following the surge last year is helping to bring buyers back to the market.
Robert Gardner, Nationwide’s chief economist, says:
“The decline in borrowing costs around the turn of the year appears to have prompted an uptick in the housing market.
Indeed, industry data sources point to a noticeable increase in mortgage applications at the start of the year, while surveyors also reported a rise in new buyer enquiries.
Gardner adds that “the near-term prospects remain highly uncertain”, partly due to ongoing uncertainty about the future path of interest rates.
He says:
After falling sharply in late December, swap rates, which underpin fixed rate mortgage pricing, have drifted back up.
Nationwide reports that house prices are now around 3% below the all-time highs recorded in the summer of 2022, once seasonal effects are taking into account.
February’s rise in prices follows a 0.7% rise during January, according to Nationwide’s data, which left prices 0.2% lower than a year ago.
Yesterday, Bank of England data showed that new mortgage approvals rose in January to their highest level since October 2022, although new lending was still subdued in historic terms:
Zoopla has reported this week that activity in the housing market has picked up; they forecast sales will rise 10% this year.
Also coming up today
We round off the week with a flurry of economic data, including the latest eurozone inflation reading and Brazil’s growth report. Factory surveys from across the world are expected to confirm another drop in activity in the eurozone and the UK.
China’s manufacturing downturn has continued, with activity shrinking for a fifth straight month in February.
This puts more pressure on Beijing to deploy new stimulus measures to support its economy.
Stock markets in Japan, Australia and India have all hit record highs today, as the equities rally continues.
The agenda
9am GMT: Eurozone manufacturing PMI for January
9.30am GMT: UK manufacturing PMI for January
10am GMT: Eurozone flash inflation reading for February
10am GMT: Eurozone unemployment report for January
Noon GMT: Brazil’s GDP report for Q4 2023
2pm GMT: Bank of England’s chief economist Huw Pill: gives a speech at the Cardiff University Business School
3pm GMT: US manufacturing PMI for January
3pm GMT: University of Michigan’s index of US consumer confidence
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By Michael Race & Emma Simpson
Business reporter and Business correspondent
Mohsin Issa, one half of the so-called "billionaire brothers" who own Asda, says he plans to hand over the running of the UK's third biggest supermarket.
In his first broadcast interview, the entrepreneur told the BBC he was carrying out a "reset" at the grocer before appointing a chief executive.
Despite Asda's £5bn debt pile, Mr Issa said he was "here for the long haul".
He also dismissed rumours of a rift with his brother Zuber, saying the pair "get on exceptionally well".
"We talk to each other probably two or three times a day. We've been very, very privileged. We have been on a journey and we have got a long way still to go," he told the BBC.
It has been quite a journey. Until now the Issa brothers have preferred to stay out of the media spotlight, giving no interviews while they built a business empire spanning 10 countries.
They have made it big time - so big the double act was listed 40th on the Sunday Times' Rich List last year with a net worth of £5.05bn.
"We've not done bad to be honest," chuckles Mr Issa at the opening of Asda's 1,000th store in Stevenage. "It surpassed our dreams and visions."
Asked if they hate being called the billionaire brothers, he replies: "It's not a tag you want to be associated, but I suppose that's what people call it and I suppose it is what it is."
The pair, from Blackburn, had humble beginnings, and ran their own individual businesses before jointly purchasing their first petrol station in Bury, Greater Manchester, in 2001.
As the oil companies began selling off and closing their High Street petrol stations to concentrate on production and refining, the brothers took a chance to expand and joined forces with private equity firm TDR Capital to snap up the vacant sites.
They also realised another opportunity in making the shops on forecourts more attractive to drivers to spend more money on coffee, fast food and other groceries, which Mr Issa said was a shift from the "dirty, kiosk style" stores offering "cokes and smokes".
EG Group
Mr Issa claimed the pair got "lucky". "We have been in the right place at the right time and taken advantage of some of them opportunities."
Today, the EG Group empire includes some 6,000 convenience and petrol stations across 10 different countries, including the US and Australia, with the likes of Starbucks, Greggs and Subway on offer at various sites.
Why Asda? "It's a once in a lifetime opportunity," said Mr Issa, the details man of the double act, who oversees the running of the supermarket while his brother Zuber focuses on the petrol station business.
Mr Issa says he works "six-and-a-half days a week", often popping up at stores across the country. He is still very much a retailer at heart.
The 52-year-old has been the architect of Asda Express, the convenience store aiming to rival the likes to Tesco Express and Sainsbury's Local.
Meanwhile, Asda is proposing raising the hourly pay rate for its employees from £11.11 to £12.04. For those working at Asda store within the M25 region, pay will rise from £12.28 to £13.21 an hour. Shopworkers' union Usdaw is recommending that their members accept the offer at a vote later this month.
"Did I ever think I'd be in a business the size and scale of this? Absolutely not," said Mr Issa. "I just had that vision of running my own business. I always had that determination of trying to control my own destiny."
But running Asda has been a challenge for the Issas, with Asda losing market share in recent times, with the likes of Aldi and Lidl attracting more customers, especially as household budgets have been squeezed.
The £4.9bn debt pile has also drawn scrutiny. Higher interest rates have prompted fears over the company's ability to pay loans off, but Mr Issa dismisses any questions that EG Group has bitten off more than it can chew, arguing the debt is sustainable due to the majority of it being fixed. Asda claims 90% of its debt is fixed.
He said Asda generated so much cash that "even if our interest payments were to double Asda has more than sufficient headroom to service that".
"It is challenging. If you get up and if you're not challenged then I suppose you shouldn't be doing your job," said Mr Issa.
"We're in a transition period where we're evolving, but also we're investing significantly. Market share will fluctuate over a period of time.
"We feel we're doing the long term investment that will help us regain some of that market."
Asda
Launching the convenience stores and implementing a "best in class" IT system have been the two goals for Mr Issa, who said he was now "getting to a point" where he could step aside and appoint a chief executive to head up the business.
The brothers have kept EG Group's base in their hometown and remain close to their roots, building homes for themselves and their families, as well as building a mosque and funding a hospital.
But while they made their money in petrol stations, the pair have bought other big brands and attempted to purchase others.
They snapped up fast food chain Leon in 2021, but narrowly missed out on buying the struggling convenience store chain McColl's, losing out to Morrisons. There were also reports they had their eye on pharmacy chain Boots and coffee shop chain Caffè Nero rejected a takeover bid.
When it comes to Asda, Mr Issa said he felt a "responsibility" to make sure he was a "great custodian at the brand". He said there were no more business deals on the cards "for now", but added "never say never".
"When you're fortunate enough to see the opportunities and have the ability to execute them and be part of a plan and then move on to the next thing then that's something that I will always look to do.
Jeremy Hunt will deliver his Budget next week GB NEWS
