BRITAIN ramped up its borrowing forecasts today as the economy slows in the wake of the Brexit vote, chancellor Philip Hammond said in his first budget plan since the UK decided to leave the European Union.
The weaker growth and tighter public finances outlined by Hammond leave Prime Minister Theresa May’s government little room to ramp up public spending or make big cuts to taxes to help the world’s fifth-largest economy through its EU divorce.
Britain will need to borrow £122 billion more over the next five years than it expected before voters decided to leave the EU in June, Hammond said. The net public sector debt is forecast to hit a peak of 90.2 per cent of economic output in 2017/18, he said.
“Our task now is to prepare our economy to be resilient as we exit the EU and match-fit for the transition that will follow,” Hammond told parliament to cheers from fellow Conservative MPs.
Hammond said that while the Brexit vote “will change the course of Britain’s history” it “also makes more urgent than ever the need to tackle our economy’s long-term weaknesses like the productivity gap.”
In an attempt to prepare Britain for leaving the EU, Hammond said the government planned to invest 1.0-1.2 per cent of GDP on economic infrastructure from 2020, up from 0.8 per cent now.
Sterling was little changed at $1.2406.
The Office for Budget Responsibility, Britain’s independent budget forecasters, said gross domestic product would grow by 1.4 per cent in 2017, down from an estimate of 2.2 per cent made in March, before voters decided to leave the EU.
Hammond, announcing the first detailed economic plans of May’s government, said the OBR believes uncertainty about Britain’s trading relationships with its EU neighbours - who buy nearly half the country’s exports - will cut growth by 2.4 percentage points over coming years.
Hammond said the OBR now saw economic growth in 2018 at 1.7 per cent compared with March’s forecast of 2.1 per cent.
“We will maintain our commitment to fiscal discipline while recognising the need for investment to drive productivity and fiscal headroom to support the economy through the transition.”
Britain’s economy has so far largely withstood the shock of the Brexit vote, wrong-footing the Bank of England and almost all private economists who expected a bigger immediate hit.
Brexit supporters, who say Britain’s economy is likely to fare much better than the widespread views of a slowdown, are likely to question the credibility of the latest OBR forecasts.
Britain is expected to run a budget deficit of nearly £22 billion in the 2019/20 financial year which until recently had been the target date for a first budget surplus, Hammond said, citing forecasts from the budget office.
“The prime minister and I remain firmly committed to seeing the public finances return to balance as soon as practicable… while leaving enough flexibility to support the economy in the near-term,” he said.
Hammond said he would stick to a business tax road map set out in March and that he would change the tax treatment of past business losses to ensure firms always pay tax in the years they make a profit.
To soften the hit to living standards for poorer households, the chancellor announced before Hammond’s statement that the government would raise the minimum wage, partially reverse planned cuts in benefits for low-earners and curb fees on renting property.
Shares in leading estate agents tumbled after Britain said it would ban one-off tenant fees to try to bring down the cost of renting, the latest move to hit landlords.
UK-BASED Nanak Hotels recently acquired the 60-room Kings Court Hotel, a 17th-century property in Warwickshire, England, for £2.75 million. This is the first regional acquisition by the privately held firm led by British Indians Harpreet Singh Saluja and Karamvir Singh.
Nanak Hotels, which operates a UK property portfolio, plans to invest in the property's refurbishment and repositioning, according to a statement from Colliers International UK, which brokered the transaction.
“We’re excited to bring Kings Court Hotel into our portfolio as our first Warwickshire acquisition,” said Saluja. “It has a solid foundation and loyal customer base. We see potential to develop the hotel while preserving its heritage.”
The West Midlands hotel, on a 4.2-acre site between Alcester and Redditch, began as a 17th-century farmhouse and now operates as a hospitality business with public areas, event and conference facilities and wedding capacity for up to 130 guests.
The hotel’s previous owner said Kings Court had been central to their work for over 30 years.
“It’s been a privilege to grow it into what it is today,” the owner said. “As we retire, we’re pleased to see it pass to a new owner who shares our commitment to hospitality and has a vision for its future.”
“The sale of Kings Court Hotel drew strong interest due to its size, location and trading performance,” said Josh Sullivan and Peter Brunt of Colliers International UK. “We’re pleased to have completed the transaction with Nanak Hotels and look forward to seeing how they develop the asset.”
In February, UK-based Shiva Hotels, led by founder and CEO Rishi Sachdev, secured $372m (£289m) to renovate The BoTree in Marylebone, London. Separately, Indian tech firm Oyo announced a $62m (£48m), three-year plan to expand its UK hotel portfolio by acquiring inventory and securing leasehold and management contracts, supporting 1,000 jobs.
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PRIYA NAIR has been appointed as the CEO and managing director of Hindustan Unilever Ltd (HUL), effective from August 1. She will be the first woman to lead the company in its history.
The announcement was made by HUL on Thursday (10). Nair, who currently serves as president, Beauty & Wellbeing at Unilever, will take over the role from Rohit Jawa, who will step down on July 31 to pursue other interests.
She has been appointed for a five-year term and will also join the HUL board, subject to necessary approvals. She will continue to be a member of the Unilever Leadership Executive.
Nair began her career with HUL in 1995 and has held various roles across sales and marketing in the company’s Home Care, Beauty & Wellbeing, and Personal Care businesses.
Between 2014 and 2020, she served as executive director, Home Care and later as executive director, Beauty & Personal Care from 2020 to 2022. She then moved to a global role as the chief marketing officer for Beauty & Wellbeing at Unilever, and in 2023, was named president of the business.
Under her leadership, the Beauty & Wellbeing division has grown into a more than £10 billion global business covering hair care, skin care, prestige beauty, and health and wellbeing, including vitamins, minerals and supplements.
She has overseen brand building, innovation, revenue growth, digital transformation, and profit delivery.
Speaking on her appointment, HUL chairman Nitin Paranjpe said, “Priya has had an outstanding career in HUL and Unilever. I am certain that with her deep understanding of the Indian market and excellent track record, Priya will take HUL to the next level of performance.”
Nair’s appointment comes after Jawa’s two-year term, during which the company focused on volume-led growth. “On behalf of the Board of HUL, I would like to thank Rohit for leading the business through tough market conditions and strengthening its foundations for success,” Paranjpe added.
Over her 28-year career, Nair has built and managed several leading consumer brands. She is recognised for turning around underperforming businesses and leading cross-functional teams.
The Indian executive has also served as an independent director on the board of a publicly listed Indian company, a board member of the Advertising Standards Council of India (ASCI), and a member of several government-backed partnerships and industry bodies.
Nair currently lives in London with her husband and daughter.
(with inputs from PTI)
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The bank's commitment to green lending reflects focus on sustainability (Photo: Getty Images)
BANKING major State Bank of India (UK) has cut interest rates on its buy-to-let mortgage products to help landlords reduce borrowing costs.
The bank said the rate cuts would help landlords invest in rental properties and meet growing demand for rental homes across the UK.
For the Standard Product Range, interest rates have been reduced by up to 35 basis points across all Loan-to-Value (LTV) tiers for five-year fixed-term products. In the SPV Product Range, rates have been cut by up to 40 basis points. Additionally, a flat fee has been introduced on larger loans for limited companies, aiming to simplify the lending process, a statement said.
The Houses in multiple occupation (HMO) product range has seen significant improvements. Rates have been reduced by up to 90 basis points on two-year fixed products and up to 50 basis points on five-year fixed products. Non-green properties now benefit from a flat rate of 5.15 per cent for five-year terms.
Fees for five-year products have also been lowered to 1.50 per cent for 50 per cent and 65 per cent LTV. Furthermore, green properties receive an additional discount of 10 basis points. Also, pricing for Multi-Unit Freehold Blocks (MUFB) has been brought in line with the HMO product range, offering similar rate reductions and terms.
Abhishek Sahay, chief business officer at SBI UK, said the bank wanted to support landlords with better lending deals.
"We understand the importance of service standards and have added capacity to our underwriting team to process applications in a timely manner," he said. "We recognise the crucial role landlords play in the UK housing ecosystem, and these rate reductions are designed to help them thrive in a dynamic market."
He added that the bank's ongoing commitment to green lending reflects focus on sustainability and reduction in the carbon footprint of the housing sector.
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Starlink will next need to acquire spectrum from the government, build ground infrastructure, and carry out testing and trials to meet the agreed security requirements. (Photo: Reuters)
INDIA’s space regulator on Wednesday granted Starlink a licence to begin commercial operations in the country, removing the final regulatory barrier for the satellite internet provider.
The company, led by Elon Musk, has been waiting since 2022 for licences to start operations in India. It received an initial approval last month from India’s telecom ministry and was waiting for clearance from the space regulator.
The licence, issued by the Indian National Space Promotion and Authorization Centre (IN-SPACe), is valid for five years.
Earlier on Wednesday, Reuters reported, citing sources, that Starlink had secured the licence from IN-SPACe.
Starlink is now the third company to receive approval to enter the Indian satellite communications market. India has previously cleared applications from Eutelsat’s OneWeb and Reliance Jio.
The company will next need to acquire spectrum from the government, build ground infrastructure, and carry out testing and trials to meet the agreed security requirements.
Musk and Reliance Jio’s Mukesh Ambani had disagreed for several months over how spectrum should be allocated for satellite services. The Indian government later supported Musk’s position that spectrum should be assigned, not auctioned.
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