Chocolate and Bond Meltdowns: 10 Things We Learned this Week

From the market collapse to trials by social media, these are the peculiar things we've learned this week

Emma Simon 30 September, 2022 | 12:10AM
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Lindt chocolate bunnies in grass

Lidl Loses Legal Action Over Copycat Rabbits 

It’s like Watership Down, but with chocolates bunnies rather than cartoon ones. The highest Swiss court has ruled has ordered the German discount retailer Lidl to “destroy” its range of gold wrapped rabbits, ruling it has infringed Lindt’s copyright. The federal court said the two rabbits, both wrapped in foil with a ribbon round their neck, were likely to be confused, and destroying the stock was ‘proportionate’ – particularly as the retailer could melt down the chocolate and reuse it other products. Watch out for premium choccie hares at a supermarket near you soon.

Mortgage Deals Disappear…

Short-term fixed-rate deals where hard to come by this week, with banks and building societies withdrawing almost 1,000 different products on Tuesday amid concerns about emergency interest rate rises in the wake of the mini-Budget. This is more than twice the number of deals pulled at the start of the Covid pandemic when the UK economy effectively shut down overnight. This mortgage ‘credit crunch’ has left those in the process of moving house or remortgaging in limbo. A small number of products started to reappear towards the end of the week, but rates had increased sharply. Mortgage deals that were priced at 1% a year ago are now charging 5.5% — with some first-time buyers looking at 6%-plus. More pain is expected to come with speculation that the Bank of England could introduce an emergency interest rate rise before its next scheduled meeting in November.

… As Pension Funds Almost Collapse

A financial crisis has many moving parts, we’ve seen this week. While the mortgage market was gumming up, there was a meltdown in the normally staid gilt markets, causing carnage for UK pension funds. These funds use longer-term gilts and gilt derivatives to ensure guaranteed payments are paid to pensioners. Most hold some cash reserves to manage movements in the price of gilts but didn’t have sufficient reserves to cope with the massive swings caused by the post-Budget sell-off. Many were forced to sell gilts to raise collateral to meet loss-making positions, driving prices down further into what some feared could be a ‘death spiral’.  At one point the market did not have any buyers of gilts, forcing the Bank of England to step in with a £65 billion emergency purchase to stop some of the UK’s biggest pension funds from actually going under. Bizarrely, this move came a week before a planned move to do the exact opposite as part of its quantitative easing wind down.

Did Hedge Fund Managers Like the Budget?

The cap on bankers’ bonuses might have been lifted, but not all hedge fund managers are pleased. Ray Dallio, billionaire founder of the American fund Bridgewater Associated, said the chancellor’s actions, which caused sterling to plummet against the dollar, “suggest incompetence”, and the UK is acting like an emerging country in their attempts to stimulate growth. However, this hasn’t stopped other managers making significant profits from shorting the falling pound. We're not naming them because they get too much publicity as it is.

ITV Not Amused by Domino’s Jibe

The TV station is clearly feeling touchy about criticism of two of its biggest stars, Philip Schofield and Holly Willoughby, for being perceived to jump the Capital Q-Queue to see the Queen lying in state. ITV boss Dame Carolyn McCall personally complained to Domino’s about its tweet, (“Apologies to anyone waiting on their pizza, we’ve just received an order from Holly and Phil #ThisMorning”), saying the pizza chain – a prominent ITV advertiser – had given little thought to the impact of these tweets or how quickly they went viral.  But Domino’s isn’t the only corporate account capitalising on the This Morning’s misfortunes. The London Dungeon used the two to launch a new pass for people, in their words who are ‘too good for queueing’. Hopefully they are braced for a dressing down from ITV bosses.

Premium Bonds Giveaway

Some good news amid the economic fallout. NS&I has increased the number of monthly £100,000 and £50,000 prizes in its monthly Premium Bonds draw. This means the odds of winning a prize just got that bit better – although they are still relatively small. The chance of any £1 premium bond winning a prize is now one in 24,000 — up from one in 24,500. NS&I says that with ‘average luck’ bondholders can expect a return of 2.2%, which is higher than the average interest paid on a high interest savings account, according to Moneyfacts. Sadly, even if you scoop the £1 million jackpot, it will buy far less that it did a few months ago, thanks to rampant inflation and the falling pound.

Some Gilts are Still Popular

Despite the meltdown in gilt markets this week, there was demand for one type of government bond. Institutional investors placed orders worth £30 billion for a new issue of its green gilt. Money raised through this will be used for environmentally friendly infrastructure projects, such as renewable energy plants, low-emission transport and pollution control. The new 30-year gilt will carry a yield of 4.29%. These green gilts are proving popular with pension funds who are looking to reduce the carbon footprint of their portfolios. The government is also launching options for retail investors through its green savings bonds, available through NS&I.

Homeworking is a Priority for New Recruits

Businesses looking to recruit staff now need to offer remote working alongside a competitive salary. Research by the Chartered Institute of Personnel and Development, the trade body for HR professionals, found flexible conditions are as important as wages when it comes to attracting staff. In an economy where unemployment levels are at just 3.6% (the lowest level since 1974), qualified and in-demand job seekers hold many cards when it comes to securing attractive deals, so Zoom meetings and pyjama Fridays are not about to disappear just yet.

JD Sports Fined for Price-Fixing

The Competition and Markets Authority (CMA) has fined JD Sports £1.4 million for colluding with rival retailer Elite Sports to fix the prices of the Rangers FC football kit. The CMA said that Rangers “took part in the collusion” but the Scottish football club received a smaller fine of just £225,000 as it was only involved in fixing prices of one product: the replica of the home shirt. The CMA said that by blowing the whistle on this anti-competitive practice it hoped football fans of all clubs would benefit and that there would be more competition in kit pricing. JD is not appealing the fine. It recently parted with long-term boss Peter Cowgill after the CMA previously imposed a £4.2 million over recordings of his secret meetings with his opposite number at Footasylum during a takeover inquiry.

Worth Your Weight in Small Change

One Chinese firm has been criticised for paying off ones of its workers in the equivalent of our coppers. The employee, who worked for a health management company, sought compensation after being unfairly dismissed. She won her case and was awarded 10,000 yuan, equivalent to around £1,300. But the firm then directed banks to pay in coins, with the smallest denomination, the 10 fen, worth less than 1p. Undeterred, the sacked employee collected her dues, pointing out the weight of this severance payment was more than 60 kg – the average size of a female worker. The company then received a further fine from the courts for obstructing officials, who no doubt had to check the payment was correct. Hopefully, this time they managed to arrange electronic payment, or at least a comedy-sized cheque.


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About Author

Emma Simon

Emma Simon  is a financial journalist, specialising in investment and consumer issues, writing for

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