Payback
Lenders reined in
The Financial Conduct Authority (FCA) has concluded its investigation into the payday and short-term loans market by proposing a series of caps to protect borrowers from exploitation. The proposals are designed to ensure that no borrower ever pays back more than 100 per cent of the value of the original loan in added fees and interest. Also, someone borrowing £100 and paying it back within 30 days should pay no more than £24 in charges with fees for late payment capped at £15. The FCA estimates that its proposals will cost the payday loans industry around £420m.
Smoking
Major combination
Two of North America's biggest tobacco companies, Reynolds American and Lorillard are pushing ahead with a proposed combination which will redraw the competitive landscape. Reynolds, the world's second biggest tobacco company, will swallow up the third biggest in Lorillard in a $25bn takeover, and will also require British American Tobacco to buy up more shares in Reynolds if it wants to maintain its 42 per cent stake. Meanwhile, Imperial Tobacco will take advantage of forced sales under anti-trust legislation to buy a number of brands from both companies for a total of $7.1bn.
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Old vs young
IFS study
An Institute for Fiscal Studies report has highlighted the gap that has grown between the incomes of pensioners and the young during the recession and in the years since, with 20-somethings being hit the hardest. All age groups apart from pensioners have seen their income fall since 2007, while pensioners' incomes surpassed those of working age households in 2010 and have continued to grow. The survey showed that the average household income of households in the 22-30 bracket fell by 13 per cent between 2007 and 2013, with a 7 per cent fall in the 31-59 bracket.
Boxed in
Mail in focus
The UK's part-privatised mail service, Royal Mail, has become embroiled along with several competitors in a competition investigation in France. A French subsidiary of Royal Mail, GLS France, has been notified by French competition authorities that it is being investigated for a breach of anti-trust regulations in the parcel delivery sector along with TNT and Fedex. The company has not quantified the potential costs of the investigation, but has warned that it could be material.
Apple joins IBM
Corporate shift
Two of America's most iconic technology companies, the former fierce rivals Apple and IBM, have announced plans to join forces to promote the use of Apple's products in the corporate world. IBM has shifted away from hardware and into services since the days of its desktop computer rivalry with Apple, and it will now provide secure cloud storage facilities and the distribution network to promote ipads and iphones into the corporate market, where they will be pre-loaded with industry-specific apps. The partnership is likely to provide a stiffer challenge to Microsoft, which has been aiming its Windows 8 software and touch screen devices at the corporate market.
Rollback rail
Labour pledge
The opposition Labour party is believed to be considering proposing the creation of a state-owned rail operator which could compete with the private sector for rail franchises in what would amount to a partial renationalisation of the UK's railways. Buoyed by the success of the government's running of the East Coast mainline since it was taken from National Express in 2009, Labour activists and unions have pressed their leadership to push for further state involvement in the railways with this weekend's policy summit expected to lead to formalisation of plans ahead of next year's general election.
