News in Brief: Brexit, OBR under fire, broadband speed, pension pay, mining

News in Breif

FTSE 100 bosses warn Brexit would threaten investment

Bosses at more than a third of the companies in the FTSE 100 have signed a letter declaring that Britain is better in the European Union, saying a Brexit would threaten investment in the UK and lead to potential job losses.

The letter is being coordinated by 10 Downing Street and is expected to be released tomorrow (23 February 2016), but signatories are known to include the chairmen or chief executives of Vodafone, BAE Systems, GlaxoSmithKline, easyJet, Barclays, BT and Shell.

In an attempt to show it is not just big city banks which are opposed to Brexit, all industries are included, ranging from retail and media to manufacturing and energy, reported the Independent.

A number of smaller company bosses and entrepreneurs have also been corralled into signing by Richard Reed, founder of the Innocent drinks company, who has previously made grave warnings about the “insane” amount of red tape that would engulf small businesses if Britain left Europe.

Office for Budget Responsibility under fire over 'non-factual changes' to reports

The Treasury select committee is concerned that the independence of the body set up by the government to provide economic forecasts is being compromised.

In a report into the Office for Budget Responsibility (OBR) published today (22 February 2016), the Treasury select committee found that words such as “topslice” to describe spending cuts were removed, although concluded that this did not change the analysis of the economic situation.

It also published emails showing that the office of the then-chief secretary Danny Alexander suggested non-factual changes to the economic and fiscal outlook in December 2014, although these were not adopted, reported the Guardian.

The OBR was formally created after the May 2010 general election to provide independent economic forecasts and it is chaired by the economist Robert Chote.

The Treasury is able to provide factual responses to the data being published but, according to a memorandum of understanding, is not allowed to influence the body in any other way.

‘Break up BT to boost the economy’

Chief executive of Sky Jeremy Darroch has warned that Britain risks falling further behind other countries on broadband speeds if Ofcom does not break up BT and foster an era of fibre investment.

Ofcom will reveal its plan to overhaul the regulation of Britain’s broadband amid a wider debate about whether BT’s consumer business should be split from Openreach, the network division that connects broadband lines.

The regulator is expected to present a range of options but looks unlikely to remove the threat of a BT break-up at this stage, reported The Times.

Sky, which relies on Openreach to connect its broadband customers, has emphasised that the current market structure threatens Britain’s economy.

HSBC slashes pension pay of senior staff by 40%

HSBC has become the latest big European bank to cut pay, slashing pension payments to top executives by 40% after pressure from investors, according to people familiar with the matter.

The change, contributing to an overall pay cut for chief executive Stuart Guliver, comes as many European banks are cutting remuneration for top executives after a downturn in performance, reported the Financial Times.

HSBC pay its top managers a cash allowance in lieu pf pension, which in 2015 amounted to half of their salaries. But after investors complained that this looked high compared with rivals, HSBC cut it to 30% of salaries in a move it will reveal with results today (22 February 2016).

The pension change comes after several recent reversals in remuneration policy at HSBC. The bank recently told thousands of managers in its UK retail and wealth management arms that they wold not receive a pre-agreed pay rise.

Miners lead FTSE higher

The FTSE 100 advanced today (22 February 2016) as mining shares took heart from strengthening metals prices, outweighing worries about Britain's potential exit from the European Union.

Banking heavyweight HSBC was the top faller after reporting weak results and confirming that it was under investigation by US regulators in relation to its hiring practices of people tied to government officials in Asia, reported Reuters.

But the London index rose 1% to 6,011.66 points in early deals and the FTSE 350 mining index hit its highest level since November 2015, gaining more than 4% with Anglo American, BHP Billiton, Rio Tinto, Glencore and Antofagasta up between 4.3% and 6%.

The price of copper reached a two-week high following the resignation of the head of China's securities regulator and an uptick in the country's steel industry which sparked hope for a revival in metals demand.