Live Blog

July 29, 2014, 3:00pm

With UK house prices at record highs, what kind of compromises might you be willing to make to get on the property ladder?

A new survey by looked into what environmental hardships home buyers might be willing to endure in order to get on the housing ladder. From prisons to rubbish tips the results make entertaining reading.

People are, for example, almost as worried about the actual danger of living on a flood plain as they are about the negligible danger faced by those living near prisons.

While 36 per cent of people would live by a prison, 50 per cent of those would expect at least a 31 per cent discount live in the shadow of a penitentiary.

24 percent of people would take shelter on a flood plain, and 50 per cent of those would want a minimum of 31 per cent off to live within flooding distance of a river.

The fear of prisons is somewhat exaggerated: there aren't really very many escapes from a prison and anyway, an escapee is probably going to want to put a few miles between him/herself and his/her cell before trying anything extra-curricular. 

Prison escapes

Source: most recent (public) government records 

Unsurprisingly the least popular neighbour was a rubbish tip, with only 16 per cent of respondents indicating that they wouldn't mind living alongside the warm aroma of refuse. 

The least problematic for those polled was to have a neighbour with solar panels (87 per cent would consider it), with a similar proportion (84 per cent) willing to live next to a wind turbine.

Finally, people are more worried by electricity pylons (48 per cent would live by one) than mobile phone masts (60 per cent) perhaps showing that fears about microwave radiation have diminished. 

Here is a table of the results:

July 29, 2014, 2:25pm

The Labour party bested its rivals in the party fundraising game for 2013, according to figures released by the Electoral Commission.

Ed Miliband's party netted £33.3m, while the Conservatives coming in second, raising £25.4m. The Lib Dems came a distant third with £7.3m.

Labour's funding included £6.9m of Short Money, which is intended to assist opposition parties with the cost of research support for front-bench spokesman, assistance in the whips' offices and staff for the leader of the opposition.

The Scottish National Party suffered a slight decline, from £2.3m to £2m. However, the story was completely different for eurosceptic UKIP, which doubled the amount of money it raised from 2012 reaching £2.5m for 2013.

The Electoral Commission reported that the Green Party had raised an income of £881,819 while the British National Party managed to land £605,208.

In total, 14 UK political parties reported having gross income or total expenditure in 2013 of over £250,000. Altogether the parties reported £76,506,409 income and £68,800,157 expenditure.

Uber cab
July 29, 2014, 2:05pm

Business travel looks like the next big market to be disrupted by the sharing economy as its poster children Uber and Airbnb unveiled plans to grow the number of business travellers using its services.

Uber has launched Uber for Business, available initially in the US and Canada but with trials taking place in the UK and France, enabling business folk to use the popular service and charge it back to their employees more easily. The service also allows companies to keep an eye on things in one place.

After getting on the wrong side of black cab drivers for disrupting the consumer cab industry, the expansion could put Uber on a collision course with Addison Lee in the corporate space this time. and Deutsche Bank are already on board and Barclays in London will be a pilot customer of the service which Uber said it plans to roll out to other markets as soon as possible.

Airbnb, the short term rental startup, has also unveiled a website aimed at business travellers, which offers more suitable rentals including wi-fi and immediate availability while leaving out listings which are shared, for instance.

Currently business travellers only make up 8 per cent of Airbnb bookings, the Wall Street Journal reports, but it has already signed up 30 companies, including Facebook and Eventbrite, to its business portal.

Both Uber and Airbnb have also partnered with Concur, which helps companies manage business expenses and travel programs.

Concur executive Tim MacDonald said the partnerships reflected the transformations in the travel industry. “With Airbnb and Uber, we are enabling, in business travel, what consumers already enjoy about collaborative consumption in their leisure. Capturing this spend then gives companies greater real-time transparency into traveler expenditure and itineraries.”  

Concur identified that transactions coming from both companies were increasing- there were 27 times the number of Airbnb transactions this year compared to last, and five times the number of Uber rides.

Global business travel spend is expected to hit $1.18 trillion this year, so no surprise Uber and Airbnb want a slice, and with consumers already on board the sell to businesses is likely to be an easy one.

BP logo
July 29, 2014, 12:39pm

Despite beating earnings expectations, BP has seen its share price slide this morning; possibly due to fears it is exposed to the fallout from the Yukos case.

Russia has been ordered to pay $50bn (£29bn) to shareholders of the now defunct company after the Kremlin seized and broke up the company dishing out its assets. 

BP has a 19.8 per cent stake in Rosneft, a Russian energy firm that could be targeted through its stake in Ruhr Oel, a German company that owns oil refineries. 

Russia has indicated a desire to fight the decision but will come under increasing pressure to pay. 

BP's share price initially rose from 496.4 pence to 501.9 pence but had fallen 1.6 per cent to 488.85 pence at pixel time.

Houses for sale
July 29, 2014, 12:21pm

The discussion around the UK property market was given an added element of confusion today as mortgage lending statistics for June beat expectations.

In its Money and Credit report, the Bank of England shows that the number of mortgages approved for house purchases was up to 67,196 in June, above the 62,007 seen in May and higher than the expectations of a group of economists answering a Reuters poll.

The rises have raised the odd eyebrow because of recent data showing that the house price rise may be tempering amid changing buyer sentiment perhaps linked to the Mortgage Market Review (MMR) affordability rules. 

However, figures are still low in a historical context, and it is likely that the rise is more a fluctuation of an erratic market rather than a trend linked to MMR. 

The total amount owed in outstanding loans increased by £2.1bn during June, down from £2.3bn in May but still higher than the £1.9bn that analysts were expecting.

The figures have been changed to reflect predictable seasonal patterns and as such present a more accurate view of trends. As we can see from the first graph, mortgages approved for home purchase have taken a dive in recent months but may be on the way back up.

Mortgage approvals are still way below peaks in terms of both number of approvals and values. Seasonally adjusted figures show 67,196 approvals for July, a figure that was higher back in February.

Before the crisis the number was almost double (114,318 in June 2007) and was at its peak in February 2004 (133,477). 

The shorter term trends (again seasonally adjusted) show that the number of approvals can fluctuate and that a single month's rise or fall should not be attributed to a factor such as MMR without more data.

The same chart but showing values indicates a £700m increase in the amount of money borrowed on mortgages which is not the smallest increase in the world: there have only been six other months since 2007 with increases above £600m.

What is more the long term trend shows that fluctuations are fairly common:

And a graph of percentage changes in the value of mortgages approvals for purchase since 2007 (next chart) shows that in context, such fluctuations happen all the time. Especially as we have recently seen several months of falling figures, we shouldn't rush into attributing this change to MMR.


July 29, 2014, 11:59am

Taxes on foods high in sugar, salt and fat, do reduce consumption but can lead to consumers simply switching brands or finding other ways to purchase fatty foods while avoiding the tax, according to a new report from the European Commission.

Higher taxes "In general do lead to a reduction in the consumption of the taxed products," the report concluded. However, consumers can use a variety of methods to purchase the foods they want while avoiding the tax, such as buying similar products that do no fall under same burdensome tax regime or switching brands.

Commissioned by the directorate general for enterprise and industry of the European Commission, the study also argues that fat taxes could have a damaging impact on the EU's agri-food sector.

SMEs would be particularly vulnerable to fat taxes as consumers switch from premium brand producers to cheaper alternatives. Furthermore, taxes would increase the administrative burden, especially if the taxes are imposed on ingredients or if the rules defining which products are liable under the tax are highly differentiated and complicated.

Director of lifestyle economics at the Institute of Economic Affairs (IEA) Christopher Snowdon, told City A.M.:

It's a basic economic principle that when prices go up, consumption goes down. But price rises have other effects, as this study shows, such as making consumers buy cheaper brands from cheaper shops. People will go to any lengths to eat the food they like, and that is why fat taxes never have any measurable effect on obesity.

The report's warnings echo research conducted by the IEA last year on Denmark's saturated fat tax. The tax had a variety of negative economic impacts including the loss of 1,300 Danish jobs. At least 10 per cent of the revenue generated by the tax was ploughed back into administration.

One survey found that only seven per cent of Danish consumers cut their purchases of butter, cream and cheese while 80 per cent did not change their shopping behaviour at all.

However, some Danes did switch brands, and others hopped over the border to Sweden and Germany to shop for their favourite high-fat foods.

The Danish government had hoped to collect 1bn krone (£115m) from the tax. But the amount raised came in at 1.4bn krone, suggesting that reduced saturated fat consumption was less than hoped for.

At the same time, the tax was in operation the market for crisps and snacks grew rather than diminished. Public opinion turned overwhelmingly against the tax. In October 2012, 70 per cent of Danes considered the tax to be "bad" or "very bad." The policy was abandoned 15 months after its introduction.

UNESDA, which represents the soft drinks industry, said the Commission study, "finds hard evidence from a number of member states on the negative impact which food taxes can have on competitiveness and jobs, leading to an increase in administrative burdens."

However, while the study made some initial conclusions, it also found that further research will be needed in order to assess more extensively the impact fat taxes could have on the competitiveness of the agri-food sector.

Guinea Pig
July 29, 2014, 11:57am

Dating site OKCupid has boldly admitted to performing experiments on users in the same way as Facebook because “that’s how websites work.”

OKCupid founder Christian Rudder detailed three experiments the website performed on users in a blog post titled “We Experiment On Human Beings!”.

Despite the public outrage after Facebook was found to have experimented with people's news feeds-  for which the social network is being investigated by US and UK regulators - the dating site said it tested out “blind dates” by removing users pictures and paired people up who were only 30 per cent compatible by telling them they were a 90 per cent match.

Rudder defended the practice, saying:

“We noticed recently that people didn’t like it when Facebook “experimented” with their news feed. Even the FTC is getting involved. But guess what, everybody: if you use the Internet, you’re the subject of hundreds of experiments at any given time, on every site. That’s how websites work.”

The revelation has failed to spark quite as much outrage as Facebook’s and the experiments have drawn mixed reactions.

Commenting on the blog post, one commenter named Josh appreciated the research, saying:

“What I appreciate most of all is that you weren’t performing this research on behalf of anybody but the people at OKCupid, and OKCupid’s parent companies. Facebook crosses a different sort of line when they openly share their data with outside, interested third parties.”

Another claiming to be a professor who performs psychological research, said any websites performing experiments should be held to the same ethical standards as scientific and medical researchers. Going by the name Justin, the commenter said:

“You must give participants a choice, and you must find a way to compensate them. It’s not that hard, and can be done. Yes, this would be unpopular in business, and yes, it would slow your progress and or increase costs, but welcome to a world concerned with protecting the rights of humans. You need to consider ethics before you consider profits.”

Facebook came under fire when a study was published in June with university researchers. It revealed the social network had manipulated the news feeds of more than half a million users to see how changes elicited a positive or negative response, but did not gain explicit consent from users. Chief operating officer Sheryl Sandberg later apologised for "poorly communicating" the experiment to users.

Huwei phones
July 29, 2014, 10:48am

Huawei shipped 64.21 million devices in the first half of 2014, 34.27 million of which were smartphones, up 62 per cent on the same time last year.

The Chinese smartphone-maker credited the rise to the success of its flagship Ascend models aimed at the mid- to high-end market.

It’s biggest launch to date, the Ascend P7 which debuted in May and is largely aimed at the higher spending Western market has sold almost 2 million units.

It has also sought to extend its global reach in competition with Apple and Samsung through sponsorship with a host of football clubs including Arsenal, AC Milan, Ajax, Borussia Dortmund, Paris Saint-Germain.

The Shenzhen-based company said it held on to its market lead in a number of Asian and Latin American markets, reporting positive growth across the globe of 550 per cent in the Middle East and Africa, 275 per cent in Latin America, 180 per cent in Asia-Pacific and 120 per cent in Europe.

The smartphone maker said in the second half of the year it plans on further developing its 4G market and is aiming to launch more mid- to high-end devices and enter the nascent wearables business.

With 34 million shipments so far this year, Huawei is almost halfway to fulfilling its target shipments of 80 million for the year, according to Reuters. It compare to Apple’s 78.92m iPhone shipments in the last two quarters. 

The figures compare to Samsung's massive 167m shipments in the last two quarters based on IDC research, however the South Korean tech giant is due to report its second quarter earnings on Thursday.

Based on the latest reports from smartphone makers and IDC figures, Huawei remains the third largest in the world behind Apple but has made considerable gains outside of its home market to produce healthy growth.

Apple’s assault on China has fared less well as Chinese newcomer Xiaomi overtook the US giant in sale share among chinese consumers, according to Kantar.

A surprise entry into the smartphone market, Xiaomi also jumped ahead of LG based on total global shipments for the previous two quarters, showing just how significant gaining a foothold in the Chinese market is for device manufacturers.

July 29, 2014, 10:20am

Apple's App Store has welcomed back Bitcoin wallet Blockchain following its removal in February.

Already available on Android devices, Blockchain launched its new iOS wallet yesterday, which has been “completely rewritten from the ground up with an emphasis on security and usability,” the company said in a press release.

Before Apple's unexplained removal of all apps offering cryptocurrency transactions, Blockchain was the most downloaded Bitcoin wallet for iOS devices.

Blockchain's return will be welcome news to Bitcoin bugs who were left bewildered by Apple's decision to remove the app, which had been available on the App Store for over two years and was downloaded over 120,000 times.

In February, Blockchain responded furiously to the move, issuing a statement on its blog:

These actions by Apple once again demonstrate the anti-competitive and capricious nature of the App Store policies that are clearly focused on preserving Apple’s monopoly on payments rather than based on any consideration of the needs and desires of their users.

However, Apple has recently softened its stance on cryptocurrencies. Back in June, Apple updated its app store guidelines to allow apps that deal in Bitcoin and other cryptocurrencies.

Apps for transmitting "approved virtual currencies" may be permitted so long as they do not break any laws. However, Apple did not provide any clarification regarding its new rules.

The updated clause in the "Purchasing and Currencies" section reads: “Apps may facilitate transmission of approved virtual currencies provided that they do so in compliance with all state and federal laws for the territories in which the app functions.”

Blockchain is the latest cryptocurrency service to join the tech giant's app store following messaging service Gliph, which allows connected users to send Bitcoin to each other.

Speaking to digital currency news site Coindesk, Blockchain CEO Nicolas Cary, said:  “Working with Apple has been quick and easy, and we really appreciate their thoughtful guidance – it’s a partnership we really value.”

Earlier this month, Blockchain revealed its new app for Android phones.

Blockchain not only allows exchanges between wallets, but iPhone and iPad users will be able buy products and services from businesses that accept Bitcoin.

Blockchain is the world's most popular Bitcoin wallet, doubling it's numbers in 2014 to 1.9m. Furthermore, Blockchain has another app on iOS, called ZeroBlock, which provides price quotes, charting figures and a newsfeed.

Next logo
July 29, 2014, 9:38am

Things are looking good for Next, as the high-street retailer revised its full-year profit guidance after a strong first half. 

Next saw increases across the board: directory sales were up 16.5 per cent and retail sales 7.5 per cent. All sales across the brand were up 10.7 per cent.

The company now expects its pre-tax profit to come in at £775m - £815m up from £750m - £790m. 

With such bullish news, it was little surprise that shares rose; quickly jumping above two per cent.