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Additional Bank Branch Closures Could Result in Almost 100 Lost Jobs

"London, UK - April 26, 2011: Group of teenagers are withdrawing cash from Lloyds TSB ATM on London Street. Rear view."

Lloyds Banking Group has recently announced that 49 of its branches throughout the UK will close. The announcement marks the second mass closure of Lloyds retail banking branches, after approximately 100 branches were closed during the middle of 2016.

Lloyds operates retail banks such as Bank of Scotland, Lloyds Bank and Halifax. The company noted that the closures are due to a decline in demand for traditional banking services and an increase in demand for digital banking.

The financial services group has seen a reduction in bank branch visits that has extended over several years — a trend that’s been widely reported in the industry as a whole. The closure of the bank branches could result in the loss of up to 100 jobs.

The company’s branch closures are strategic, aimed at reducing its total retail branch numbers without affecting quality of service for account holders. Lloyds stated that approximately 95% of its account holders will still be within five miles of a local bank branch.

Approximately 90% of customers of Bank of Scotland and Halifax will also be located within five miles of their nearest operational branch.

In a statement, the company said that customers “are increasingly choosing to use digital and mobile channels for their everyday banking needs. As a consequence, the number of customers visiting some of our branches has declined in recent years.”

“Branches remain a key part of the service we offer to customers, and we continue to make significant investment in revitalising our network, shaping it to their needs.”

The bank’s decision to close branches has run into opposition from the Unite union, which has claimed that the closures make it more difficult for many people to access local banking.

Unite national officer Rob MacGregor commented on the closures, stating that many were part of an “unnecessary” bank branch closure programme. MacGregor noted that Lloyds recently returned to profitability and mustn’t “ignore its corporate social responsibilities.”

The closures are part of Lloyds’ long-term strategy to reduce its physical footprint by closing an estimated 400 branches. The company plans to replace many of its bank branches with “micro branches” without counters, staffed with self-service machines instead of employees.

The micro-branches will be staffed by two people to assist with problem solving and provide specific services to customers. Customers will be connected with mortgage advisors through video link, allowing Lloyds to reduce the cost of operating its branches.

Lloyds isn’t the only banking company to cut back on physical branches in recent years. The Royal Bank of Scotland announced earlier this year that it would close up to 158 branches in response to the increase in demand for online banking services among account holders.

HSBC also announced earlier this year that it would close up to 62 additional branches, on top of 55 branches already planned for closure. Other banks to downsize their High Street footprints include the Yorkshire Building Society, which plans to close up to 48 branches.

Up to 2,500 Jobs Lost as Wholesaler P&H Goes Into Administration

Motion blur of two men moving boxes in a warehouse.

Palmer & Harvey, one of the UK’s largest grocery and tobacco wholesalers, has entered into administration. The company’s pre-Christmas collapse has resulted in 2,500 redundancies in the immediate term, with up to 900 more potentially lost jobs in the near future.

P&H is one of the UK’s largest grocery and tobacco wholesalers, supplying goods to as many as 90,000 convenience stores and grocery stores throughout the country. Some of P&H’s top customers include Sainsbury’s and Tesco.

In business since 1925, Palmer & Harvey has been a significant part of the British grocery and tobacco industry for almost a century.

The company has faced financial difficulties for some time, with efforts made to strengthen the company’s finances since earlier this year. PricewaterhouseCoopers, working as administrators for P&H creditors, have pointed to poor cash flow as the primary reason for the collapse.

Other reasons for the administration include unsuccessful efforts to bring in outside financing to  fuel the company’s operations. P&H’s collapse comes shortly before the Christmas season — a major retail and grocery shopping period.

Many of P&H’s top customers have contingencies in place after the company’s collapse, with Sainsbury’s and Costcutter already announcing contingency plans to ensure certain products remain in stock.

However, the business’s entrance into administration means that there could potentially be short term shortages of some products supplied by P&H in UK convenience and grocery stores, such as cigarettes.

Prior to administration, P&H employed almost 4,000 people around the UK. The business was the UK’s top supplier of tobacco products, responsible for a large part of brands such as Japan Tobacco International and Imperial Brands’ products supply chain in the UK.

The company had reportedly hoped for a financial restructuring from companies in the tobacco industry, many of whom have previously relied on P&H for wholesale distribution in the UK. As of November 29, however, the company has formally entered into administration.

P&H isn’t the only wholesale grocery company in the UK to face financial difficulties. Brands such as Costcutter are also reportedly under pressure, with weak UK consumer spending a major threat to many retail businesses.

New data from the Office for National Statistics shows that UK household spending growth had slowed to 0.1% in the three months to June. The rate of growth is the slowest on record since the last quarter of 2014.

Weak wage growth has also affected UK retail spending habits, with consumer spending less and household budgets under squeeze.

Earlier this year, P&H entered into talks with several of its top customers, including a proposed extension to existing deals with Tesco that would extend P&H’s contract with the supermarket giant to five years.

However, with the company’s financial collapse, the future of both its confirmed and proposed agreements with customers such as Tesco and Sainsbury’s remains uncertain, as do the 900 jobs that could potentially be lost over the coming months.

SoftBank Seeks Uber Shares, at Steep Discount

San Francisco, USA - June 7, 2016: Outside the headquarters of the ride-sharing company Uber, located at 1455 Market St in San Francisco

Japanese telecommunications giant SoftBank Group Corp. is aiming to acquire a large stake in Uber Technologies at a steep discount, reportedly hoping to spend $6 billion to acquire shares in the ride-hailing company at a significant discount from its latest valuation.

Uber, which is currently valued at $69 billion, has had a rough year, dealing with a series of key scandals including a hushed up security breach and a range of sexual harassment lawsuits.

SoftBank, as well as its partners, hopes to acquire as much as $6 billion of stock in Uber with a 30 per cent discount, pricing the ride-hailing company at $48 billion rather than its current $69 billion valuation.

The deal, should it go through, would be one of the largest ever acquisitions of stock in a private company.

SoftBank’s potential partners include firms General Atlantic and Dragoneer Investment Group, a “long-only, growth-oriented public and private” investment group based in San Francisco. Uber’s management has reportedly been responsive to the offer of outside investment from SoftBank.

For Uber’s new CEO Dara Khosrowshahi, a deal with SoftBank could be an opportunity for Uber to raise new funds while gaining a large, powerful supporter to help the company move forward after a tough year.

2017 has been a difficult period for Uber as a company. The company was forced to admit its role in covering up a major security breach that affected over 55 million users and drivers. The company’s previous CEO, Travis Kalanick, also resigned after a workplace culture scandal.

Part of SoftBank’s interest in the deal could be Uber’s negative public image. Kirk Boodry, an analyst at New Street Research, stated in Bloomberg that SoftBank’s deal could be aimed at achieving a price that “builds in all the negative news” about Uber.

Uber has had an extremely challenging year, facing everything from sexual harassment issues to a security breach that cost the company the trust of both its drivers and customers. It’s also currently stuck in a criminal probe over its alleged attempts to spy on its rivals.

The probe recently turned up revelations that Uber’s employees used encrypted messages to “spy” on its competitors without a record of communications. Employees were reportedly told how to destroy “sensitive” messages to reduce the risk of messages leaking to the public.

Uber is alleged to have spied on rival Waymo, formerly the Google Self-Driving Car Project, in a bid to steal corporate trade secrets. Richard Jacobs, Uber’s former corporate surveillance team manager, was one of the most recent members of the company to testify in court.

The ride-hailing company is also facing a multimillion-dollar consumer protection lawsuit over its role in covering up a major security breach. The lawsuit, filed in Washington, could result in fines for the company over its lack of efforts to properly respond to the hacking break-in.

For SoftBank, Uber’s mounting scandals are almost certainly viewed as a liability, but also as an opportunity for the well-known telecommunications giant to acquire shares in fast-growing Uber at a significant discount.

Higher Unemployment and Weak Growth Risks for UK, Warns OECD

Monitor view over a male shoulder, job search title on the screen, close up. Education, business concept photo

The Organisation for Economic Co-operation and Development (OECD) has warned the UK that higher unemployment and slow economic growth are likely in the future, partly due to economic uncertainty regarding Brexit.

The warning was published as part of the latest OECD economic outlook, which lists economic data and projections for a variety of countries. The OECD data states that UK growth is likely to slow over the next two years from its current rate of 1.5% to as little as 1.1 per cent.

A slow in growth could have significant implications for the UK economy. Currently, the jobless rate is at a record low level of 4.3 per cent across the country. A decline in growth could lead to fewer employment opportunities and an increase in the number of unemployed individuals.

The OECD report also states that falling consumer confidence and a reduction in investment in UK businesses could affect growth, in addition to the “negative impact of uncertainty about the final outcome of Brexit negotiations.”

According to the document, a “modest rise in the unemployment rate” is likely as a result of the slowdown in economic growth. The report states that UK job creation “is losing momentum” as the number of people classified as economically inactive begins to grow.

“Economically inactive” individuals in the UK grew to 8.8 million over the past reporting period — the most significant increase in the last seven years. In the quarter to September, employment was approximately 32 million after a sustained decline from April to June of 2015.

Other financial risks to the UK include a growing level of consumer debt. Combined with fairly stagnant wages and a consistent level of inflation, the report states that this poses a significant risk to the UK’s continued growth and economic stability.

Finally, significant levels of inflation caused by uncertainty over the value of British currency are also to blame for the recent slowdown in economic activity.

The report’s conclusions indicate that Britain will be the only major economic to experience a slowdown in growth for three continuous years. According to the OECD data, Britain will stay alongside Japan as one of the slowest growing of the world’s developed economies.

According to the report, consumer debt is a particularly pressing issue for the UK. With large amounts of consumers owing credit card debts and personal loans, the OECD report states a major default risk in the event that economic conditions continue to slow down.

The report recommends more stringent affordability checks for personal loans and sources of credit to reduce lending risks. Despite this, the Bank of England recently declared that lenders had passed its “stress tests” for coping with a disorderly Brexit.

In response to the potential economic slowdown, the government has taken a series of steps to stimulate economic activity. Philip Hammond introduced a new housing policy aimed at reducing the cost of purchasing property for new buyers — a scheme that’s attracted controversy.

While the UK will likely remain near the end of the pack amongst developed economies over the coming years, economic activity continues to grow in developing countries such as China, India and Vietnam, bringing the global growth forecast to 3.6% for 2017.

Undercover Report Reveals Challenging Work Conditions at Amazon Warehouses

Hagerstown, MD, USA - June 2, 2014: Image of an Amazon packages. Amazon is an online company and is the largest retailer in the world.

Ever since Amazon overtook Wal-Mart as the world’s largest retailer in 2015, things have been on the up and up for the e-commerce giant.

Its founder, Jeff Bezos has gone from a technology industry success story into the richest man in the world, based largely on the value of his Amazon ownership. The company, which Bezos founded in his garage in 1994, has grown tremendously over the past two decades.

However, a new undercover report from the Sunday Mirror reports that the rapid growth of the e-commerce giant may have come at a cost, with difficult conditions for workers in many of the company’s fulfilment centres.

Photographs and video taken by an undercover reporter show Amazon workers falling asleep while standing up at their stations. Workers at many of Amazon’s fulfilment centres are held to strict standards, with some reportedly required to process a parcel every 30 seconds.

Alan Selby, who spent five weeks at the company’s fulfilment centre in Essex, noted that some workers had been rushed out of the warehouse by ambulance after collapsing at work after long shifts and demanding weekly house.

The investigative reported claims that AMazon treats its workers as “expendable commodities”, and that humans are viewed as the least efficient part of the company’s operations.

Employees at the warehouse are reportedly required to work as many as 55 hours a week, with timed toilet breaks and challenging targets for fulfilling orders. Workers, who are paid £8.20 per hour, are required to pack as many as 120 items per hour.

This target is reportedly set to rise to 200 items per hour, further increasing the strain placed on workers at the e-commerce company’s fulfilment centres.

Workers at the Essex centre are reportedly discouraged from sitting during their shifts, which can extend for as long as 10 hours per day. Productivity metrics, such as a worker’s “units per hour” are continually displayed to encourage maximum efficiency.

The undercover report isn’t the first to document difficult conditions for Amazon workers. An earlier report carried out by a BBC reporter, who worked undercover at an Amazon depot for several weeks, found that the company’s drivers were under severe pressure to meet targets.

Drivers reportedly exceeded the speed limit to make deliveries on time, as well as urinating in bottles due to limited time for toilet breaks. Despite these issues, some drivers claimed to find the job “sometimes enjoyable” due to customer satisfaction.

In a statement, Amazon notes that it “provides a safe and positive workplace with competitive pay and benefits from day one.” The e-commerce company is “proud to have created thousands of permanent roles in [its] UK fulfilment centres in recent years.”

“We offer great jobs and a positive environment with opportunities for growth. As with most companies, we expect a certain level of performance.”

“Targets are based on previous performance achieved by our workers. Associates are evaluated over a long period of time as we know a variety of things could impact the ability to meet expectations in any given day or hour.”

London House Prices Climb to 14.5 Times Average Earnings

Typical white stuccoed terraced houses detail in London

London house prices have risen to a new record high, at 14.5 times the average earnings of local residents. New data from Hometrack shows that property in London continues to rise in price, often at a pace that far exceeds earnings growth.

Last year, home prices in the capital earned international attention after research showed that the average London home cost more than 14.2 times the city’s average salary. Prices this year are up even more, increasing the home-price-to-earnings ratio to 14.5.

Property prices have risen in many of Britain’s major cities over the past decade, with areas like Cambridge and Oxford following closely behind London. However, in certain parts of the UK, the average home price has remained relatively steady over the past 15 years.

Property prices in the South East, as well as Liverpool, Newcastle and Liverpool have stayed at the same earnings-to-home-price ratio for the last 15 years. In some cases, housing prices have fallen relative to local salaries.

However, London’s status as an important international business hub and desirable property market have set it apart from the average. The house-price-to-earnings ratio for London is now at its highest level in the last 15 years.

Several factors have contributed to this boom in housing prices. Falling mortgage rates over the past few years have increased buying power for many London residents, resulting in a surge in the cost of residential property.

Other factors include increased buying interest from international residents, many of whom live in London as a second home, as well as a slight decline in real wages across the UK.

Despite this recent growth, analysts believe London’s house prices may not continue to rise at current levels. A recent report in Estate Agent Today states that the London residential property market could potentially underperform as housing prices adjust to match buyer expectations.

Richard Donnell, research and insight director at Hometrack, stated that home unaffordability in London has “reached a record high despite a material slowdown in the rate of house price growth over the last year.”

“Lower housing turnover in the capital has led to a tightening of supply in recent months, which has stabilised house price growth. Even so, the gap between average earnings and house prices in the capital has never been wider.”

Rising property prices are a major cause of concern for low-income households in London, with many properties requiring a deposit of more than £100,000, putting them out of reach of many people on below-average incomes.

In spite of rising property costs relative to salaries, London has fallen slightly in its total cost of living over the last year. Currency fluctuations mean that London now ranks third in global cost of living rankings, behind New York City and Hong Kong.

Other areas of the UK with fast-growing house prices include Birmingham, where properties in the Ladywood area have increased in value by a staggering 17% over the last year, according to data from Barclays.

Growing Number of Consumers Caught in “Subscription Traps”

Chiang Mai: Netflix website showing on screen laptop with macbook pro at cafe. Netflix being popular internationally

A growing number of UK consumers are being caught in “subscription traps” — recurring weekly or monthly subscription payments that are difficult to cancel.

Data from Citizens Advice shows that the average person spends £50 per month on recurring services because of difficulties in cancelling. Gym memberships and online streaming services are among the most common recurring costs for UK consumers.

Among the complaints received from Citizens Advice is one from a person that attempted to cancel a recurring subscription after losing their job, only to be asked to provide written proof from their employer in order to terminate the contract.

Others include consumers that spent hundreds of pounds over the course of years, often for products and services they weren’t aware of.

In total, more than 600 problems have been reported to Citizens Advice over the past three months, specifically related to subscription payments. On average, customers spent £160 on subscription services — often services they did not want, need or frequently use.

Of these customers, more than 90% faced difficulties when trying to end their subscriptions, often in the form of overly difficult cancellation processes that required consumers to cancel over email or by phone.

Many of these subscriptions use free samples to lure customers in, only to charge consumers large amounts of money over the long term. A recent article in the Mirror states that many UK consumers face payments of up to £90 a month after requesting “free” samples online.

Andy Allen, service director of the UK European Consumer Centre, states that consumers are often “hooked by an advert places, for example, on social media for a free trial’.” The adverts typically advertise free samples of diet pills, teeth whitening devices or skin creams.

Most of these free trials request a small fee from consumers — often £1.99 or less — for postage and handling costs.

Hidden deep in the terms and conditions, however, is a complicated billing system that states consumers can be charged as much as £90 per month for products they never wanted due to deceptive “free trials.”

Citizens Advice has noted cases where people spent almost £1,000 in total before realising that they were being billed, all for “free” samples. One consumer spent more than £350 for a beauty product sample advertised as costing £4.95.

Many of the most common “free trial” scams and subscription traps can be avoided through a combination of research and skepticism towards offers that seem too good to be true.

Citizens Advice recommends that consumers avoid offers that look and feel too good to be real, such as heavily discounted or free trials. If a free trial is offered, check that there aren’t hidden fees buried deep inside the terms and conditions that could end up increasing the cost.

Consumers are also recommended to avoid purchasing free trial items from companies based outside the UK, as these contracts can be much harder to end. In cases of obvious fraud, your card issuer may be able to return your money via a chargeback.

Cyber Monday “Largest Online Shopping Day in U.S. History”

Woman shopping on internet

This year’s Cyber Monday is shaping up to be one of the most lucrative in recent memory for online retailers, and potentially one of the biggest ever.

According to the Los Angeles Times, online purchases hit a record high over the Thanksgiving holiday weekend, with a growing number of American consumers ordering products from online retailers such as Amazon, Walmart and others.

The data published in the LA Times piece comes from Adobe Analytics, which tracks spending and transactions from the 100 largest US-based online retailers. According to the data, upwards of $14 billion was spent online over the weekend following Thanksgiving Day.

Cyber Monday was the largest online shopping day of the season, with almost $3.4 billion spent via online e-commerce retailers by 1:30 pm — an increase of 17% from spending patterns during the previous Thanksgiving weekend.

This year’s high level of online spending can be attributed to several factors. One is the general growth in e-commerce. More than at any previous point in the last decade, consumers are more comfortable ordering products online.

A second factor is the increasing focus of many large retail chains on online sales. Major retail stores such as Kohl’s reported a “record-breaking” weekend, recording nearly 16 million visits to its online store in a single day.

Despite the increase in online sales, visits to physical retail stores — a famous, of infamous part of Black Friday — fell slightly, possibly due to retailers offering lucrative online deals for shoppers that preferred to stay at home.

According to the National Retail Federation, total holiday spending increased by 4% over the course of the year. However, visits to physical retail stores over the Thanksgiving period were down 1.6% compared to 2016, indicating that much of the season’s growth is online.

The largest winner of the Thanksgiving shopping period appears to be Amazon.com. Although the e-commerce giant hasn’t released its holiday weekend shopping results to the public yet, it has released some interesting statistics.

During the first five hours of Black Friday, Amazon reportedly sold more than 200,000 toys to its eager audience of online shoppers. The company reported that Amazon Echo devices, pressure cookers and home DNA tests were among its top-selling Thanksgiving weekend items.

Amazon, which has always been a leader in e-commerce, now makes up 43% of e-commerce transactions, according to EMarketer data. The company’s dominance in online shopping has allowed it to create its own “shopping holidays,” such as the company’s Prime Day.

According to Amazon, Prime Day sales exceeded Black Friday and Cyber Monday spending, indicating that Amazon’s existing customer base is so much of an asset that the company can shape its own demand patterns and “create” consumer holidays of its own.

Unfortunately, the Thanksgiving shopping period wasn’t as much of a success for other retail brands as it was for Amazon. Department store giant Macy’s reported credit card and gift card processing issues that affected its ability to capitalize on the increased holiday demand.

Advertising Watchdog to Crack Down on Broadband Providers

wlan antenna

From May, UK-based broadband providers will be required to advertise more realistic speeds to their public, bringing the currently used “up to” speeds seen in advertising closer to reality.

Currently, broadband providers are allowed to advertise “up to” broadband speeds — download speeds that are available to 10 per cent of customers — instead of the average speed achieved by home broadband users.

The new regulations, designed to reduce customer complaints over differences between speeds promoted in advertising and realistic connection speeds, will limit advertising claims to download speeds achievable by at least 50% of customers during periods of peak network load.

The initiative is being handled by the Committees of Advertising Practice (CAP), which recently found that broadband advertising is likely to mislead users about the average connection speed that can be achieved from a home connection.

Several independent studies have found that the majority of UK internet users don’t receive the connection speeds that are advertised by broadband providers. As many as 75% of broadband users have reportedly never received their advertised peak download speeds.

Under the new regulations, which will become law from May 23, broadband providers will need to advertise the median peak download speed. The CAP claims that this figure provides a more accurate representation of the speeds home broadband users can expect from regular use.

Broadband speeds are affected by numerous factors, from a user’s location and usage habits to their hardware. Shahriar Coupal, director of CAP, claims that the new rules will help consumers get a “better understanding of the broadband speeds offered by different providers.”

The new regulations have been praised by Ofcom, which has supported a chance to advertising rules for broadband services.

Britain has consistently lagged behind other European countries in broadband speeds — a fact that many have attributed to misleading advertising and low service quality. In August, Britain’s average connection speed ranked 31st in the world, below New Zealand and Thailand.

Poor connection speeds have resulted in consumer and political backlash. In July, dozens of MPs backed a report calling for the introduction of financial compensation for customers that paid for broadband download speeds they did not receive.

The report, which was coordinated by the British Infrastructure Group of MPs (BIG), noted that broadband is increasingly viewed as an essential utility similar to water or gas, and that service quality in the UK had “not caught up with demand” from consumers.

Connection speeds are not the only aspect of the broadband internet industry to earn criticism from consumer advocate groups. The ASA has also investigated the use of phrases like “fiber broadband” in advertising for connections that only partially use fiber optic cabling.

Despite this, progress is being made. The average home broadband speed rose to 36.2Mbps this year, up from 28.9Mbps the year before. Internet speeds are up across the UK, although rural areas continue to lag behind urban areas in infrastructure and line speed improvement.

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