Energy supplier Bulb’s takeover by Octopus ‘faces fresh delay’; UK mortgage approvals slump – business live

The sale of energy supplier Bulb to Octopus is facing further delays as rivals plan to challenge the UK government’s decision in court, Bloomberg reports.

We had been expecting a City court to approve the sale today. But lawyers for the bust supplier’s administrators say rival suppliers are pushing for a judicial review.

Bloomberg have the details:

Iberdrola’s Scottish Power, EON, and Centrica Plc’s British Gas are planning to take the deal to Judicial Review, a court process that looks at the legality of a government decision, Teneo Inc.’s lawyers said at a hearing in London on Tuesday.

“It is worth observing at the outset that the intervening energy companies each had an opportunity to participate in the sales process,” Richard Fisher, a lawyer representing Teneo who are overseeing the sale, said in court documents.

“All could have sought meetings with the administrators or government had they wished to investigate different funding options.

Bulb was the largest energy supplier to collapse as energy prices soared in 2021, and was too big to be rescued by a rival.

Instead, it entered a special administration overseen by the UK government and run by the restructuring firm Teneo.

The cost of bailing out Bulb, which has around 1.4m customers, has hit £6.5bn, according to the Office for Budget Responsibility. The cost escalated after the Ukraine war drove gas prices even higher this year.

Octopus sealed a deal to take on Bulb at the end of October. But, as we reported earlier this month, the UK’s spending watchdog is to examine the deal.

According to Bloomberg, Scottish Power objects to the deal struck as it may involve a “dowry” being paid to Octopus of at least £1bn to cover buying energy to supply customers with, its lawyers said in court documents.

More here.

Most UK business leaders say ‘Brexit freedoms’ not a priority

Richard Partington

Most UK businesses have no interest in or understanding of the government’s flagship “Brexit freedoms” plan to scrap EU regulations, according to a survey of bosses.

The British Chambers of Commerce (BCC) said almost three-quarters of company directors were either unaware of the government plans or did not know the details.

Across all business areas, about half in the survey of almost 1,000 firms said deregulation was either a low priority or not a priority at all.

William Bain, the head of trade policy at the BCC, which represents thousands of firms of all sizes across the country, said:

“Businesses did not ask for this bill, and as our survey highlights, they are not clamouring for a bonfire of regulations for the sake of it.

“They don’t want to see divergence from EU regulations which makes it more difficult, costly or impossible to export their goods and services.”

Bank of England’s Mann: We could pull back on rates once inflation tamed

Richard Partington

Just in: Bank of England policymaker Catherine Mann has suggested the Bank could cut interest rates from the middle of next year

Mann has said that financial market pricing suggesting cuts in interest rates were “an accurate assessment of what the prospects for Bank rate are”

Asked on an online conference hosted by the Conference Board what the determinants would be for considering rate cuts, she said:

“One of the things about market assumption was that it did contain some drift down from the peak. A humped profile. I think that is an accurate assessment of what the prospects for Bank rate are.

That there will be a peak that will serve to temper medium-term inflation expectations, and at that point, we have the opportunity to pull back from that peak.

So we’re really managing in my view, it’s critical to manage inflation expectations, and in order to do that you might have to be a bit more aggressive in the near term so that you can then pull back once you have tempered those medium term inflation expectations.”

Mann also flagged that inflation is ‘increasingly embedded’ in UK firms, something which will concern the BoE.

The financial markets are currently pricing Bank rate hitting at least 4.5% by next summer, up from 3% at present, before then easing back.

Last week, deputy governor Sir Dave Ramsden suggested he could vote to cut interest rates if cost of living pressures eased faster than expected.

The Financial Times have a good scoop – Jack Ma, the Alibaba founder and once the richest business leader in China, has been living in central Tokyo for nearly six months.

Ma’s whereabouts have been unclear since Beijing launched a crackdown on China’s tech sector. He vanished for several months at the end of 2020, after regulators dramatically blocked Ma’s plans to float his Ant Group on the stock market, in what would have been the world’s largest share offering.

Ma had angered Beijing by criticising China’s banks, claiming they had a “pawnshop mentality”, prompting authorities to rein him in.

As the FT point out, Ma has managed to avoid the zero-Covid restrictions that have hampered China’s recovery, and angered its people.

They report:

Ma’s months-long stay in Japan with his family has included stints in hot spring and ski resorts in the countryside outside Tokyo and regular trips to the US and Israel, according to people with direct knowledge of his whereabouts….

Since his fallout with Chinese authorities, Ma has been spotted in various countries including Spain and the Netherlands.

Spending less time in his home in China means the billionaire has avoided the tough Covid-19 quarantines imposed on anyone entering the country, as well as thorny political issues arising from his previous push to build influence in the country’s halls of power.

Hopes that China might ease its Covid restrictions soon have cheered investors, weakening the safe-haven US dollar.

That’s pushed the pound back over the $1.20 mark – back above its levels before the mini-budget.

Sterling has also benefitted from hopes that America’s Federal Reserve may slow its interest rate rises soon.

However, the pound may suffer if the UK falls into recession.

James Athey, investment director at abrdn, fears that the recent rally may fade,

We think the easy gains have been had for now. The reality is that a recession is coming, and a Fed rescue is coming less quickly than in recent years.

We see that reality as a coming cold shower for buoyant risk markets and as ever we expect the dollar to benefit from the resultant flight to quality. With the UK economic outlook being even worse, this portends an unhappy combination for sterling.