(Alliance News) - The following is a summary of top news stories Wednesday.
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COMPANIES
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The Competition & Markets Authority said it is probing whether British Airways and Ryanair have broken UK consumer law over ticket refunds. The CMA has opened enforcement cases into both firms over concerns that, during periods of lockdown across the UK, BA, part of International Consolidated Airlines Group, and Ryanair refused to give refunds to consumers that were lawfully unable to fly. The firms instead offered vouchers or the option to rebook. "While we understand that airlines have had a tough time during the pandemic, people should not be left unfairly out of pocket for following the law. Customers booked these flights in good faith and were legally unable to take them due to circumstances entirely outside of their control. We believe these people should have been offered their money back," said CMA Chief Executive Andrea Coscelli.
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The "failed and damaging" traffic light system for international travel must be abandoned if the UK travel and tourism sector is to be saved from total collapse, an industry body has warned. The London-based World Travel & Tourism Council said the UK government must scrap the system, which has "wreaked havoc" among consumers and businesses, in order to save hundreds of thousands of jobs. The risk-based system with red, amber and green ratings for countries around the world determines the quarantine and coronavirus testing requirements people face when returning to the UK. But Portugal being moved from green to amber caught many holidaymakers by surprise and left thousands of UK tourists scrambling to get home before new quarantine rules came into force on Tuesday morning. Ryanair Chief Executive Officer Michael O'Leary said the "stop, go, stop, go approach to travel is bonkers".
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Jet engine maker Rolls-Royce said it has appointed Anita Frew as a non-executive director and chair designate. Frew is chair of chemicals firm Croda and a non-executive director at miner BHP Group. Until recently, she was deputy chair and senior independent director at lender Lloyds Banking Group. She will join the Rolls-Royce board with effect from July 1, and succeed Ian Davis as chair at the start of October. Davis is departing after nearly nine years as chair. The UK
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Honeywell International said its Quantum Solutions unit and Cambridge Quantum Computing will combine to form "the world's largest, most advanced quantum business". The North Carolina, US-based technologies and safety solutions provider said the new company will offer a high-spec quantum computer and a full suite of quantum software, including the first quantum operating system. Honeywell said it will invest between USD270 million and USD300 million in the new company and will have a long-term agreement to help manufacture the ion traps needed to power the quantum hardware. Honeywell Chair & Chief Executive Officer Darius Adamczyk will serve as chair of the new company. The new company will be led by Ilyas Khan, the CEO & founder of Cambridge Quantum Computing, which is based in London.
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The state of Ohio filed an unprecedented lawsuit calling on a local court to declare Alphabet's Google as much a public utility as an electric company. Google should be designated a public utility subject to government regulation regarding its search engine and other services, Ohio attorney general Dave Yost contended in the legal filing. Public utilities supply essential goods or services such as water or power, and are often effectively monopolies. "When you own the railroad or the electric company or the cellphone tower, you have to treat everyone the same and give everybody access," Yost said in a release announcing the suit. Yost accused Google of favoring its own products, websites, and services in search results, putting competitors at a disadvantage. Google said the lawsuit had no basis in fact and that it will defend itself in court.
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After years of preliminary investigations, the French judiciary has opened a probe into Renault for alleged fraud. As Renault reported, the case concerns exhaust emission values of "older generation" diesel vehicles. The judiciary has been investigating the case for about four and a half years. Renault has rejected the accusations, saying it has always complied with French and European regulations and there is no fraudulent software in its cars. The manufacturer, headquartered in Boulogne-Billancourt near Paris, must, according to its own statements, post a deposit of EUR20 million for possible compensation and fines. In addition, a bank guarantee of EUR60 million is due to compensate for possible damages.
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MARKETS
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Equity markets were mostly lower on Wednesday, with the FTSE 100 index in London weighed down by a stronger pound. Travel stocks were rebounding, however, despite new pressure to provide cash refunds for cancelled flights. IAG was up 3.4% and Ryanair up 2.4%. "Investors were more optimistic about the travel and leisure sector on increased hopes that many travel restrictions will be lifted soon," said Russ Mould, investment director at AJ Bell. "The US Centers for Disease Control & Prevention has relaxed travel advice for more than 110 countries and territories, thereby increasing the earnings prospects for companies that provide transport or accommodation."
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CAC 40: down 0.1% at 6,543.97
DAX 30: down 0.3% at 15,591.57
FTSE 100: down 0.5% at 7,060.97
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Hang Seng: closed down 0.1% at 28,742.63
Nikkei 225: closed down 0.4% at 28,860.80
S&P/ASX 200: closed down 0.3% at 7,270.20
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DJIA: called marginally lower, down 9.00 points
S&P 500: called up 0.1%
Nasdaq Composite: called up 0.1%
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EUR: firm at USD1.2186 (USD1.2181)
GBP: up at USD1.4183 (USD1.4147)
USD: unchanged at JPY109.47
Gold: down at USD1,888.44 per ounce (USD1,892.50)
Oil (Brent): up at USD72.68 a barrel (USD71.52)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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Beijing accused Washington of "paranoid delusion" after the US Senate passed a sweeping industrial policy bill aimed at countering the surging economic threat from China. America's political parties overcame partisan divisions to support pumping more than USD170 billion into research and development, one of the most significant achievements in Congress since Joe Biden's presidency began in January. The US Innovation & Competition Act represents the largest investment in scientific research and technological innovation "in generations", according to Senate Majority Leader Chuck Schumer. The bill is seen as crucial for US efforts to avoid being out-manoeuvered by Beijing as the adversaries compete in the race for technological innovation. The foreign affairs committee of China's top legislature called the bill an attempt to interfere in the country's internal affairs and deprive it of its "legitimate right to development through technology and economic decoupling", state media reported.
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China's factory gate inflation rose at the highest rate in over a decade last month, official data showed Wednesday, as the world's second-largest economy worked to contain a surge in commodity prices. Factories so far seem to be absorbing costs rather than passing them on to consumers as domestic demand recovers from the strict coronavirus lockdowns imposed last year. The producer price index, which measures the cost of goods at the factory gate, exceeded expectations to spike 9.0% on-year in May, said the National Bureau of Statistics. This marks its highest jump since September 2008.
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The UK government is hoping to make an exception for the country's financial services sector in the new new global tax system signed by G7 finance ministers last weekend, the Financial Times reported. Chancellor of the Exchequer Rishi Sunak is pushing for a carve-out for the City of London, with the UK looking for an exemption on financial services, the newspaper said. Sunak had said the weekend's deal was an "historic agreement" and would force "the largest multinational tech giants to pay their fair share of tax in the UK". The FT said Sunak raised the issue at the G7 meeting and will continue to do so at the G20 talks next month. The FT also cited a British official, who said: "Our position is we want financial services companies to be exempt and EU countries are in the same position."
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G7 nations must overhaul global trade rules to stop powerful countries using economic coercion, Australian Prime Minister Scott Morrison said ahead of a meeting of the group's leaders in the UK. As Australia's shadow trade war with its largest trading partner China shows few signs of abating, Morrison told the Perth USAsia Centre that the global rules-based order is "under serious strain". "The most practical way to address economic coercion is the restoration of the global trading body's binding dispute settlement system," he said. "Where there are no consequences for coercive behaviour, there is little incentive for restraint." Beijing has imposed harsh economic sanctions on a range of Australian products in recent months, including tariffs or disruption across several agricultural sectors, coal, wine and tourism.
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Germany's trade balance grew in April as exports nudged up, figures from Destatis showed. In April, exports were up 0.3% month-on-month at EUR111.8 billion, and surged 48% on the same month a year ago. Imports fell 1.7% on a monthly basis to EUR96.3 billion, though this represented a 33% jump year-on-year. As a result, the trade balance for April, on a calendar and seasonally-adjusted basis, was EUR15.9 billion. However, the market had expected a surplus of EUR19.5 billion, according to FXStreet. March's surplus had been EUR14.0 billion.
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The US on Tuesday eased its warning against travel to a number of major nations including Olympics host Japan, Canada and Mexico after reassessing Covid concerns. The State Department issued an advisory asking Americans to reconsider travel due to the risk of Covid-19, upgrading a blanket warning earlier not to go. Other countries for which US travel advice was eased include close allies such as France and Germany as well as Greece, which has been welcoming vaccinated US tourists, and South Africa, which has battled a Covid variant. Such travel advice has been closely watched for clues on when the US will ease restrictions in place for more than a year on travel from European nations.
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US President Joe Biden and Senate Republicans on Tuesday ended weeks of negotiations on an infrastructure package, with the two sides failing for now to reach agreement on the massive measure. With the talks over, Biden shifted strategy as he engaged a new, bipartisan Senate group in an effort to reach a compromise. The White House and top Republican negotiator Senator Shelley Moore Capito each said they could not agree on the scope of a bill to fund a huge national upgrade to roads, public transport, bridges, ports, broadband internet and other elements. The White House last week had proposed reducing the cost of Biden's USD2.3 trillion American Jobs Plan to USD1.7 trillion by having other bills cover some of the projects it would pay for and cutting out some spending altogether.
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UK Chancellor Rishi Sunak is willing to accept a short delay to Step 4 of the road map to ending the lockdown amid a rise in cases, PA reported. A Whitehall source pointed towards the Treasury having gone "long" on emergency coronavirus support packages in the budget to cover the possibility of a delay to the plans. It comes as Tory lockdown-sceptic Charles Walker warned Prime Minister Boris Johnson against delaying the earmarked end to legal coronavirus restrictions. Health Secretary Matt Hancock said there was a "challenging decision" to be made over the further lifting of Covid restrictions on June 21.
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By Tom Waite; thomaslwaite@alliancenews.com
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