News in Brief: HSBC HQ, Brexit, FTSE 100, digital skills, business taxes

News in Brief

HSBC to keep its HQ in London

HSBC is to keep its headquarters in the UK after a 10-month review during which time the government has made a series of changes regarded as favourable to the bank.

HSBC’s chief executive Stuart Gulliver said: “Having our headquarters in the UK and our significant business in Asia Pacific delivers the best of both worlds to our stakeholders.”

The decision was announced after a board meeting in London, where the bank has been based since moving its headquarters in 1992 at the time of the takeover of Midland Bank, reported the Guardian.

The announcement comes just as China’s stock market was due to begin trading for the first time after a week’s holiday during which markets elsewhere in the world have been buffeted by fears about the banking sector.

Britain’s biggest bank said it would abandon its usual practice of reviewing its headquarters every three years after what it described as an exhaustive process.

Most UK firms seriously weighing risks of Brexit, said CBI head

Most major British firms are seriously considering the risk of Britain leaving the European Union and many are making contingency plans, according to the head of the Confederation of British Industry (CBI).

Speaking to reporters at a briefing, CBI director-general Carolyn Fairbairn said the prospect of a British referendum around the middle of the year on whether to leave the EU was a growing concern for business.

Prime minister David Cameron hopes to reach a deal to reform the European Union at a summit of EU leaders this weekend (15 February 2016), which he can put to voters in a referendum many analysts expect to be held in late June 2016.

Recent opinion polls have shown a narrow but growing lead for campaigners who want to leave the EU, reported Reuters.

FTSE 100 index opens higher

The FTSE 100 index shot higher this morning after a rally in most Asian stock markets, despite poor trade data out of China.

The UK's blue-chip index rose 1.84% to 5,812 points, led higher by Reckitt Benckiser and International Consolidated Airlines Group (IAG), reported City A.M.

HSBC was one of the biggest risers this morning after the bank announced that it would remain headquartered in the UK. Its share price rose 1.42% to 446.65p.

"I get the impression that there have been some sensible conversations with George Osborne, the Treasury, Bank of England and the Financial Conduct Authority. There clearly has been some softening of approach by the authorities in their attitude to HSBC," said David Buik, market commentator at Panmure Gordon.

He added: "In fairness HSBC also realises that London is the best place to conduct complicated M&A and other business transactions and also accepts that London is the legal capital of the world."

‘Forgotten middle’ lacking digital skills

Britain is at risk of falling behind other countries in digital developments as millions of people are struggling to learn skills, the head of Barclays’ retail bank will warn.

In a speech to the Oxford Guild, Ashok Vaswani will claim that Britain faces creating a “forgotten middle” group of people who are “simply getting by” online.

Many of these people are at risk of falling behind in the workplace and could struggle to protect themselves from cybercrime, he will argue. Businesses could find it tough to combat increasing digital competition, reported The Financial Times.

“The digital revolution is happening right now, it affects each and every one of us on a personal level, at a business level, and now increasingly at a societal level too,” he will say.

“We must also now ask ourselves if the UK is fully equipped to compete in the global digital economy. I want leading UK businesses to do more because we cannot allow the UK to get left behind.”

Chancellor's avalanche of business taxes has pushed UK to a 'tipping point', warns CBI

The chancellor's tax assault on UK business risks undermining the economic recovery, the Confederation of British Industry (CBI) has warned.

Britain's biggest business group said the apprenticeship levy, living wage and the rising burden of business rates amounted to a £29bn raid on companies over the next five years, reported the Telegraph.

Unveiling the CBI's ‘Budget submission’, director-general Carolyn Fairbairn warned the onslaught of taxes in the Summer Budget and Autumn Statement had pushed the economy to a "tipping point".

While businesses were building the extra costs into their plans, Fairbairn said some sectors, including retailers and the care sector, could buckle under the "cumulative burden" of extra levies.

The introduction of a living wage of more than £9 an hour by 2020 is expected to cost businesses £12.6bn, according to the CBI, while the apprenticeship levy is forecast to cost £11.6bn over the next five years.

Fairbairn said: "What is coming over very clearly from our members, particularly in the context of a more fragile global economy, is that any more could really tip investment decisions, could tip growth plans and could tip job creation."