Live Blog

October 7, 2015, 10:07am

Data published yesterday by Halifax showed the capital's supply of homes for sale - both new-builds and people putting their previously-loved properties on the market - continues to be pathetically low.

But as the government attempts to increase the number of homes being built in the capital, parts of London are about to experience mini housebuilding revolutions.

Knight Frank's Global Development Report, published yesterday, highlighted the areas where the biggest opportunities exist for London's developers. Where will the capital's hottest residential areas be in the next 10 years? Read on...

1. Acton

Why? When Crossrail arrives in 2018, Acton will be connected to the capital via a high-speed link

How many homes? There are 1,000 homes with planning permission at the moment, although there is scope for far more

Who'll live there? City workers, those who need an easy link to The North (Old Oak Common's HS2 hub isn't far)

2. Old Oak Common

Why? One of London's few remaining large-scale brownfield areas, Old Oak Common is earmarked as a transport "superhub", with a huge interchange between HS2 and Crossrail planned

How many homes? Plans are being drawn up for as many as 24,000 new homes - as well as retail property and new homes

Who'll live there? Again, the area will be opened up to City workers 

3. Earls Court

Why? Whatever you think of the demolition of the old conference centres, the area is about to become one of London's largest regeneration projects

How many homes? Under current plans, 7,500 homes across four "villages" are planned - although they are still the subject of disputes from locals

Who'll live there? Is this the beginning of the extension of Kensington and Chelsea? The area is ripe as a new hotspot for the super-rich - and with prices expected to hit £2,000 per sq ft, they may be the only ones who can afford it

4. Bayswater

Why? Currently an odd no-man's-land wedged between Paddington and Notting Hill, plans to redevelop part of Queensway mean buyers are sniffing around. It'll also be served well by Paddington's Crossrail station

How many homes? At the moment it's on a per-development basis but Knight Frank suggests buyer demand is rising

Who'll live there? Notting Hill-types and City slickers, as prices edge towards £2,750 per sq ft

5. Nine Elms

Why? Need we explain? The regeneration of Battersea Power Station, coupled with the impending arrival of the American Embassy, means billions is being ploughed into the area

How many homes? At the moment, 15,000 homes are planned over the next 10 years

Who'll live there? Anecdotal evidence suggests many of the homes - particularly in the power station development - are owned by investors who will rent them out. With a luxury feel to many of the apartments on offer, the developments are aimed at professional renters

Ikea had been touting furniture that feels like leather as the real thing
October 7, 2015, 10:04am

The 2015 award that companies may not be boasting to customers about has been announced by Choice, given to goods and services that did not live up to their promises.

The long-awaited Choice Shonky Awards have been given to big name brands including Ikea, for a "leather furniture" section that turned out to "be made from distinctly non-bovine stuff like polyester and polyurethane". The reasoning continued:

The giveaway is in the fine print on the "product information" tab on the websites, with one model described as "durable coated fabric that has the same look and feel as leather". Not quite the same thing, we say, and we think most cattle would agree. 

Samsung was given the accolade for it's washing machines that involved "pyrotechnics", and the "less-than-energetic recall efforts around a line of top loaders - 144,000 machines in all - that have an unfortunate tendency to go up in flames". Especially "shonky", Choice says, given Samsung is "obligated to buy back the faulty machines".

Read more: Rescuing brands from oblivion

At the ceremony, Choice suggested that Samsung could have broadcast a similar advert to the one below:

Drinks giant Coca-Cola Company, meanwhile, was given the award for giving an "unrestricted gift" to a a television channel which Choice thinks suggests "we shouldn't stop gulping down cans of Coke, we should simply exercise more". 

And Kleenex, who said they had created "flushable cleansing cloths" simply had not, according to Choice: "Clearly, Kleenex flushable wipes are sewer pipe-unfriendly, and we don't think they're consumer-friendly either. Why pay extra for something flushable that you really shouldn't flush? And guess who has to pay the plumber when they block up your pipes?"

Read more: These are the world's most valuable brands

Brands also decorated by Choice was National Australia Bank for its "low rate" credit card charging anything but, Arnott's Tiny Teddies, for fooling parents in to believing their snack was good in order to sell as many as possible, and "in an age of increasing childhood obesity, it's no laughing matter".

Payday lenders were also pointed out for preying on vulnerable people with high rate loans, and Nanosmart, a biopharmaceutical company, for flogging laundry balls that "do diddly sqaut". 

October 7, 2015, 10:00am

The Royal Mint is hoping to attract gold buyers with deeper pockets with the launch of a new kilo bullion bar.

Since setting up shop online a year ago with a trading platform that allows retail investors to buy precious metals from as little as £20, sales of gold have increased by more than 50 per cent and more than 12,000 customers from 35 different countries have invested through so far.

Read more: Buy gold for just £20, Royal Mint encourages retail investors

Anyone snapping up a gold kilo bullion bar will even get it delivered to their door. For those looking for somewhere more secure, they can always choose to keep it in the Royal Mint's vaults which are guarded by the Ministry of Defence.

"Our 1,000 year history and world-renowned heritage means that we are globally recognised as a reliable authority on precious metals. As passes its first anniversary and begins to mature, we wanted our offering to reflect this and felt the kilo gold cast bar adds depth to our range and will appeal to the serious investor,” said Royal Mint's bullion director Chris Howard.

The exact price of the kilo bar depends on the spot price of gold at the time of purchase. Today, that's just under £25,000.

It's UK investors who are snapping up the most bullion. But Greeks' are also eager to get their hands on the precious metal - a safer bet perhaps than investing closer to home with the country's economic worries.

Here's who's buying up gold bullion.


October 7, 2015, 9:59am

When it comes to success, it's not just having brains that brings you rewards – having an inflated view of your own ability also gives you a boost.

This was the discovery made by a group of researchers at Baylor University in Texas, who carried out tests on a group of more than 100 undergraduate students who spent a large amount of time in each other's company.

Through questionnaires and intelligence tests, they gave each person a score for intellectual arrogance, with the most arrogant having an inflated view of their actual intelligence, and the humble having an accurate view.

Read more: Being poor but clever won't get you far on the career ladder - you need rich parents to win the biggest salaries in the UK

When they compared the academic results of the intellectually arrogant with those of the intellectually humble, they found a clear correlation – the more arrogant the student, the better they performed. Details are published in the Journal of Research in Personality.

"One possibility is that people who view themselves as intellectually arrogant know what they know and that translates to increases in academic performance," said Wade Rowatt, one of the researchers involved.

There was no doubt in the students' minds about who was humble and who was arrogant – the arrogant ones were viewed as arrogant by almost all other students. Common character traits ascribed to them were extroversion, attention-seeking and dominance. The humble, meanwhile, were viewed by their peers as competent, agreeable and open to criticism.

And yet, the arrogant people themselves had no idea they were arrogant – they tended to rate themselves as much more humble than others considered them to be.

While viewing yourself as something special has its perks, both in academia and in the workplace, the researchers provided a warning: it can make you fairly unpopular among colleagues. In group tests, the arrogant students were consistently given worse evaluations by their peers.

“What I think is important about intellectual humility is its necessity for not only science, but for just learning generally -- and that applies to the classroom, a work setting, wherever," said lead researcher Benjamin Meagher.

Learning something new requires first acknowledging your own ignorance and being willing to make your ignorance known to others. People clearly differ in terms of their willingness to do something like that, but that willingness to learn, change one's mind and value the opinion of others is really needed if people and groups are going to develop and grow.

October 7, 2015, 9:55am

Londoners might have culture, restaurants and world leading events on their doorstep, but the city is full of people who would rather stay in for the night.

Half of us choose to entertain at home rather than heading out to a bar, club or restaurant, according to new research.

Avoiding the hustle and bustle of heading out might make for a more relaxed evening, but we're feeling the pressure when it comes to how good our kitchen is.

Nearly a third of us are worried that our kitchen isn't as impressive as our friends - and that they will judge us for it. One in 10 Londoners even said they'd forgo having a holiday to spend the money on improving their kitchen.

Anyone feeling at touch of kitchen envy can blame our natural instincts, according to one psychologist. 

“The urge to compete is deeply rooted in our evolutionary past, and there is a good reason for it," Harley Street psychologist Doctor Becky Spellman explained.

"Throughout time, those who have been able to show that they are “best” at what matters at the time (like being able to provide for a family by hunting, or being the most capable at raising children) have been the ones most likely to have their pick of potential mates, and to rise to positions of leadership.”

It's those in their early 30s who are staying in rather than heading out on the town more than any other age group, the survey of 2,000 homeowners by Beko found.

Of 31-35 year olds, 56 per cent said they'd rather entertain at home. But even younger generations, who might be expected to spend their nights on the town, are eschewing the bright lights of the city, with 40 per cent saying they'd go for a night in rather than a night out.

October 7, 2015, 9:36am

Thought millennials were changing the workplace? They're nothing compared to today's generation of children, who will have careers that are almost unrecognisable compared with the current workforce, a futurologist has warned. 

Rohit Talwar, the founder of trend researcher Fast Future, told a headteachers' conference in St Andrews yesterday that kids today will have "portfolio careers" that could span 40 jobs and 10 different careers.

Read more: At least City slickers' jobs are safe from robots

And the world of work is likely to look very different to what's around now: although between 30 per cent and 80 per cent of jobs that exist now will disappear in the next 10 to 20 years, making money out of the sharing economy could become a more accepted way to generate cash.

“You might be driving [an] Uber part of the day, renting out your spare bedroom on Airbnb, renting out space in your closet, doing delivery for Amazon or renting out your driveway," he said. 

But such freedom comes with a cost: while Talwar said he expects people to live to the ripe old age of 120, he added that they should expect to work until they are 100. 

And he warned that educators must stay abreast of changes to how people work so children develop the skills they'll need for the future. 

“We need to start thinking about these things, we need to start thinking about the kinds of skills we’ll need to help people stay employable.

October 7, 2015, 9:31am

The UK’s company boardrooms are a rapidly changing place, with the percentage of women having doubled in the past four years to reach Lord Davies’ target of 25 per cent. Sure, men may still be in the majority, but the City is full of powerful women - movers and shakers, award-winners and influencers to be inspired by.

We’ve put together a list of the most important women working in London’s financial hub on social media.

Our list is automatically updated weekly, and is based on active users of Twitter and their Klout scores, which takes into account various metrics from Twitter, Facebook, Google Plus, LinkedIn, Instagram, Foursquare and Wikipedia.

Think you, or someone you know, should be on the powerlist? Hit the “join” button below to get started.

Please remember all submissions are reviewed by our moderators, and City A.M. reserves the right not to accept or exclude people from the list as it deems appropriate.

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October 7, 2015, 9:19am

The Volkswagen emissions cheating scandal could have a major impact on the German economy, according to new research.

The country's car industry accounts for €380bn, or 20 per cent of all business revenues, according to the report from Dario Perkins, chief European economist at Lombard Street Research.

German cars also make up almost a third all vehicles produced in Europe. If other companies are found to have been up to the same tricks, or consumers lose their trust in German car makers more generally, it would threaten Germany’s growth, which is currently still shaky.

“The automobile industry has been particularly buoyant in recent years, accounting for almost 20 per cent of Germany’s exports. So a sustained slump in German car production could inflict a sizeable macroeconomic hit,” Perkins said.

However, he said it was unlikely to have implications on the health of Europe’s financial sector.

“Beyond the worse case macro impact, it’s a struggle to see this story becoming a threat to financial stability. Sure, the collapse in VW’s share price will weaken the company’s balance sheet, but its total bond issuance – at around €31.3bn – is unlikely to herald a new European credit crisis,” Perkins added.

The scandal, which broke in mid-September, is likely to cause some blushes among German lawmakers.

“There are also wider political considerations, not least the embarrassment the affair is causing Berlin after a period in which EU leaders have been trying to instil German business virtues in the rest of the euro area,” the research said.

October 7, 2015, 9:14am

Tesco may have beaten expectations for UK sales in the first half of this year, but analysts are warning that the troubled supermarket still has a long way to go if it is to shrug off the many problems facing the UK's biggest retailer. 

Tesco's profits fell 55 per cent in the six months to 31 August, but UK like-for-likes were down just 1.1 per cent - better than was widely expected. However, investors are still unimpressed - Tesco's share price was down three per cent in early trading.

The consensus view among analysts is that chief executive Dave Lewis, who has been in the role more than a year, must do more to turn the business around - with some warning that success is not a given. 

John Ibbotson, director of the retail consultancy Retail Vision, said: “A year into his tenure, Tesco’s embattled chief executive has lived up to his ‘Drastic Dave’ nickname. Yet on this evidence he will have to be more drastic yet.

“Dave Lewis has not shied away from a ruthless pruning of Tesco’s bloated balance sheet, but this has failed to stop the group’s operating profit slumping by more than half. But the frantic selling off of Tesco’s family silver – including a £4bn deal for its biggest overseas asset, the South Korean unit Homeplus – has done little more than buy time.

“Tesco’s turnaround has begun, but it is achingly slow and there is nothing inevitable about it yet. But after a brutal first year, Dave Lewis’ job still looks considerably safer than Stuart Lancaster’s.”

Shore Capital analyst Darren Shirley warned that there was not enough visibility about Tesco's solvency ratios “We continue to believe that Tesco will need to raise capital and potentially a considerable amount in order to progress without looking over its ‘balance sheet shoulder’,” he said.

“Taking the good ship Tesco to a place where it has a) strong solvency ratios, b) sustainable sales growth and positive operational gearing, c) equity valuation multiples that make the stock look attractive on market comparable ratios and d) recommences a dividend stream that is well covered, attractive and sustainable, seems a very long way off.”

Independent analyst Louise Cooper was similarly downbeat. “Its like-for-likes in UK may be down less than in past, but they're still down,” she said. “Food price deflation is running at 2.8 per cent in the industry year to date and Tesco average basket price down three per cent.

“For all the talk of recovery, this is a really tough industry environment. And there is little chance of it recovering.”

Independent analyst Nick Bubb said the results were "predictably awful".

"Somewhat surprisingly, Tesco has said the portfolio review is now concluded (with the wretched Dunnhumby retained after all) and that further reduction in the £8.6bn debt mountain (excluding the Tesco Bank) can be achieved by driving cash out of the business. That seems to firmly knock a potential rights issue on its head, which would have been embarrassing at this stage of the proceedings, although Tesco had always played down the chances of that, to be fair."

Julie Palmer, partner at Begbies Traynor, said Tesco was “still struggling to see light at the end of the tunnel”.

“With a Serious Fraud Office investigation still casting its shadow, the unrelenting pressure on margins that discounters Aldi and Lidl continue to exert combined with the additional costs it faces from the National Living Wage, the group’s turnaround project still has a long journey ahead.

“Tesco is now faced with the uncertain task of not only having to ameliorate its flat sales growth, but also win back investor’s trust,” she added. “Disposals, store closures and cost cutting will only do so much for the beleaguered supermarket giant, and market insiders will now be questioning whether ‘Drastic Dave’ has been truly drastic enough.”

October 7, 2015, 9:13am

AB InBev is not giving up on its desire to "build the first truly global beer company" by increaseing its offer for rival SABMiller to £42.15 per share. SABMiller's share price rose three per cent on the news.

Two previous bid offers from the Beligian company - for £38 and £40 per share - were previously rejected by SABMiller.

Yesterday shares in SABMiller dropped following a report that it had turned down an offer from AB InBev.

AB InBev said it was "disappointed that the board of SABMiller has rejected both of these prior approaches without any meaningful engagement", in a statement released this morning.

The brewer continued:

"Given the largely complementary geographical footprints and brand portfolios of AB InBev and SABMiller, the combined group would have operations in virtually every major beer market, including key emerging regions with strong growth prospects such as Africa, Asia, and Central and South America."

Altria, SABMiller's largest shareholder, said it "supports a proposal of £42.15, or higher, with a partial share alternative, and, subject to finalization of terms, would be prepared to elect the partial share alternative. Altria urges SABMiller’s board to engage promptly and constructively with AB InBev to agree on the terms of a recommended offer".

AB InBev is going all to court its British rival, dedicating its home page to declaring the merits of what the companies could do together: "Put simply, we believe we can achieve more together than each of us could separately," Carlos Brito said in a video.

The British firm first confirmed that it had been approached by its rival in September. AB InBev, the world's largest brewer, which is partly owned by Brazilian investment fund 3G, still has until 14 October to make an official offer.

The deal between the world's two largest brewers would create a company worth around £177bn.

This week SABMiller reported a nine per cent fall in reported revenues in the three months to the end of September, placing the blame on currency charges. Sales volumes rose two per cent in the period.