Bitter Pills: 10 Things we Learned This Week

A blizzard of fury at the CMA, a problem at the Post Office, and big old bust-up at BP all hit the headlines this week, and that wasn't all...

Emma Simon 28 April, 2023 | 12:30AM
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Microsoft Has Gone in Macro-Hard* on the CMA

Microsoft was clearly not happy with the Competition and Markets Authority’s (CMA) shock decision to thwart its plans to buy US gaming firm Activision Blizzard, which makes the games Call of Duty and Candy Crush. This was despite Microsoft making concessions to the CMA. Microsoft president Brad Smith was furious, saying that it was a "dark day for the UK", and adding that the European Union looked like a more attractive place for technology investment than the UK. Some might argue this was a bit of an entitled response, given that Microsoft already controls between 60% and 70% of cloud-based gaming, and the Activision Blizzard deal would’ve boosted that further. Is a new era of "squabble capitalism" upon us?

*phrase coined by comedian and musician Tawny Owl

LVMH is Europe’s First $500bn Company

Moet corks will be popping at LVMH, which is now the first European company to be worth more than $500 billion (making it the world’s ninth biggest company). LVMH’s fortunes have been buoyed by a rebound in demand for its luxury goods from wealthy Chinese consumers after the lifting of Covid-19 restriction in the country. This news comes just two weeks after its chief executive Bernard Arnault topped Forbes’ “richest billionaires” list, beating Elon Musk into second place by a cool $67.6 billion. Until now the wealthiest companies have been dominated by US names, and this doesn’t look like it will change soob. Worth noting too, perhaps, that the world’s first $500 billion company was, err, Microsoft, which hit the milestone way back in 1999, back when the CMA’s predecessor The Office for Fair Trading ruled the market competition regulation roost.

The Post Office is Stamping Out Money Laundering

New rules have been introduced to stop hundreds of millions of pounds of "dirty" money being laundered through the Post Office’s branches. According to the Financial Conduct Authority (FCA) there are weaknesses in the Post Office's "everyday banking facility", which allows customers from other banks to use its counter services. In particular, it was concerned paper paying-in slips, and a lack of limits on the number of £20,000 deposits that can be made each day, had made the Post Office’s systems vulnerable. The FCA now says it has worked with banks and the Post Office itself to create a more traceable card-based deposit system, as well as imposing lower deposit limits.

Feel Unhappy? You're in Pity City

Oh dear. Another CEO has apologised after an ill-judged "town hall" meeting became a viral hit. The previously-unknown Andi Owen, chief executive of US-based furniture company MillerKnoll, tried to motivate staff by telling them should "leave Pity City" and stop worrying about future bonus payments. The video call was recorded by fed-up staff (median salary of $44,810) and shared all over the internet, earning Owen (who took home a $5m pay package last year, including substantial bonus) the unofficial title of world’s worst boss. To be fair, she has a lot of competition for the coveted prize, even in the foot-in-mouth category.

Inflation is a Bitter Pill to Swallow

It wasn’t just Michigan-based CEOs that were trying to dampen expectations. Back in the UK, The Bank of England’s chief economic Huw Pill was urging the UK’s savers to accept they were poorer and stop asking for pay rises. Speaking on a US podcast, Pill said there was a "reluctance to accept that, yes, we’re all worse off", and that increased wage demands to maintain spending power would just fuel inflation further. His comments have sparked criticism, not least from those who originally called for the BoE to act earlier on interest rate rises when inflation first started to head above the 2% target in the aftermath of Covid-19. Others have also pointed out the 10.1% inflation in prices may be less keenly felt by Pill than others. While you can’t doubt his economic logic, his rather bleak message — get used to feeling poor — is certainly a difficult one to communicate. 

Climate Resolutions Have Fallen at BP

BP’s AGM was a rowdy affair, with climate protestors carried out by security guards after heckling and interrupting chair Helge Lund’s opening remarks. Action groups such as Fossil Free London were involved in the disruptions, but weren’t the only ones making headlines. A number of large UK pension funds, including Nest, the Universities Superannuation Scheme and the Local Government Pension Scheme, all staged their own protests, tabling resolutions to sack Lund and back a resolution by Dutch climate group Follow This to align BP’s Scope 3 emissions for 2030 with the Paris Climate Agreement. The rebel shareholders might have avoided being manhandled by security guards this time, but they did not secure their aims. Rowdy AGMs aren’t going away.

Are We in a Period of Price Gouging?

Who’s making money from inflation? That was the question asked of food and drinks giants like Nestle, Coca-Cola, and Unilever this week. All reported resilient sales despite hefty price hikes. Unilever’s boss Hein Schumacher was forced onto the back foot to deny the company was "profiteering" from the rising cost of many basic ingredients – be it oil, flour and sugar – telling investors they had only passed on 75% of these cost increases to consumers. For its part, Coca-Cola has indicated the pain is far from over for consumers with further prices rises expected in its fizzy drink range soon. A new term is now doing the rounds: "greedflation".

Pensions Are Taxing

Pension savers taking lump sums from their retirement savings have overpaid around £1 billion in tax to HM Revenue & Customs (HMRC), according to new figures from the revenue. To get the money back, people either have to complete numerous forms, or wait until the end of the tax year, when HMRC should automatically refund the money. In total HMRC has refunded £1 billion in tax since 2016 – following a 2015 that allowed over-55s to freely access their pension funds. Last year alone, withdrawals totalled £160 million, as more people used their retirement savings to top up their income amid rising bills.  

And Tax is Also More Taxing Too

Speaking of tax, HMRC has also seen its tax receipts increase – and it’s not all down to wrongly-collected tax on pensions. Receipts for income tax, capital gains tax and stamp duty for the 2022/23 tax year are all higher than the year before. As James Gard’s piece explained on this week, the amount we pay in tax – and the limited steps savers can take to mitigate this – have changed. Don’t try and ring them up about it though. This week HMRC staff announced 18 days of strike action in May and June, in protest at pay, pensions, and job security.

The Banking Sector is Looking…Mixed…

The global banking sector still looks vulnerable, particularly at regional level in the US. This week shares in troubled First Republic Bank were suspended on several occasions as its share price plunged amid concerns about its financial health and news that savers had withdrawn around $100 billion in deposits since the collapse of Silicon Valley Bank. Elsewhere, some of the world’s largest banking names were announcing bumper profits amid a higher interest rate environment. Barclays reported its quarterly profits were at a 12-year high, while investment bank Standard Chartered was enjoying the sugar rush of higher interest rates, with its quarterly profits close to a 10-year high. It's good news for investors, and perhaps less good for consumers funding this through higher borrowing rates.

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Emma Simon

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

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