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TOP NEWS SUMMARY: UK Regulator "Deeply Disappointed" By Pension Advice

(Alliance News) - The following is a summary of top news stories ...

Alliance News 19 June, 2019 | 12:36PM
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(Alliance News) - The following is a summary of top news stories Wednesday.
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COMPANIES
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The UK Financial Conduct Authority is "deeply disappointed" financial advisors are still recommending consumers leave defined-benefit pension schemes. Having surveyed 3,015 firms between April 2015 and September 2018, 2,426 had advised on transferring a defined-benefit pension, the regulator said. Some 234,951 members of the schemes received advice on whether to transfer or not. Of these, the FCA reported 69% were advised to transfer, covering a total value of GBP82.8 billion worth of pensions. The FCA is concerned such transfers are "likely to be unsuitable" for most clients.
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Property developer Berkeley Group beat market expectations for annual profit after "resilient" trading. For the 12 months to April 30, the FTSE 100 company posted a pretax profit of GBP775.2 million, down 21% year-on-year, but well ahead of analyst consensus of GBP710 million and towards the top end of the range of analyst predictions. At the start of the financial year, Berkeley had expected a 30% fall in annual pretax profit. The pretax profit figure is, Berkeley said, an 18% out-performance against a plan to deliver GBP3.0 billion in profit in the five years to April 2021, a target set in December 2016. In line with existing guidance, the company continued, pretax profit for its year ending March 2020 will fall by around a third year-on-year. "This has been another year of solid performance for Berkeley, delivering financial results ahead of expectations while unlocking an increasingly valuable mix of social, economic and environmental benefits for the communities in which we work," said Chair Tony Pidgley.
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Premier Inn owner Whitbread said continued weakness in the UK has hampered sales in the first quarter of its financial year. UK like-for-like sales in the first quarter of Whitbread's year ending February 2020 fell 3.7%, with accommodation falling 4.6% and food & beverage by 2.1%. Total sales the UK declined by 1.1% year-on-year, with accommodation slipping 1.5% and food & beverage by 0.4%. Including Whitbread's international operations - its new Germany hotel business - total group sales fell 1.0% on the year before. Accommodation was 1.3% lower and food & beverage down 0.4%. "We have delivered a resilient performance in the first quarter despite more challenging market conditions and we continue to make good progress with our efficiency programme, which is helping to partially offset another year of high industry cost inflation," said Chief Executive Alison Brittain.
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AstraZeneca announced drug approvals in Japan, including Lynparza for advanced ovarian cancer and Breztri Aerosphere for chronic obstructive pulmonary disease. Breztri Aerosphere has been approved in Japan as a triple-combination therapy, making it the first global approval and only triple-combination therapy in a pressurised metered-dose inhaler device in that country. In addition, Bevespi Aerosphere has been approved by the Japanese Ministry of Health, Labour & Welfare for patients with COPD as a fixed-dose long-acting product to relieve symptoms. Lynparza has also been approved in Japan for first-line maintenance therapy in BRCA-mutated advanced ovarian cancer. This follows Tuesday's announcement that Lynparza has been approved in the EU for the same disease, with both approvals based on the success of AstraZeneca's phase 3 Solo-1 trial. Lynparza is part of a strategic oncology collaboration between Astra and US pharma company Merck & Co and is being jointly developed by the two companies
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Midcap lender CYBG affirmed guidance for 2019, with its rebrand as Virgin Money UK to be completed by the end of the year. CYBG, which owns Clydesdale Bank and Yorkshire Bank, bought Virgin Money in a GBP1.7 billion deal in 2018. CYBG's name will change by the end of 2019, it said, with the Virgin Money brand to be relaunched and rebranded late in the year. CYBG unveiled a range of new targets, reaffirming guidance for its year ending September 2019 of a net interest margin of 165 basis points to 170 basis points, with the margin at 172 basis points at December 31, the end of CYBG's first quarter.
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MARKETS
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London stocks were lower following strong gains on Tuesday after European Central Bank President Mario Draghi opened the door to the possibility of further stimulus. Wall Street is pointed to a flat open ahead of the day's main event, the latest policy decision from the US Federal Reserve.
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FTSE 100: down 0.2% at 7,425.97
FTSE 250: down 0.1% at 19,299.42
AIM ALL-SHARE: down 0.3% at 935.16

GBP: higher at USD1.2585 (USD1.2551)
EUR: higher at USD1.1206 (USD1.1193)

GOLD: lower at USD1,343.00 per ounce (USD1,347.87)
OIL (Brent): lower at USD61.72 a barrel (USD62.56)

(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Tory leadership front-runner Boris Johnson's bid to become prime minister received a fresh boost as former Brexit secretary Dominic Raab backed his campaign. The endorsement of Johnson by the hardline Brexiteer came as fellow leadership contender Rory Stewart said he was in talks with Michael Gove on "combining forces" in the contest. Such a move would be seen at Westminster as a "Stop Boris" bid in the battle for the Tory crown. Raab, who was eliminated from the contest in the second round after receiving support from only 30 MPs, said Mr Johnson was the sole contender who would ensure Brexit happened by October 31.
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A change of UK prime minister will not result in a change in the Irish Government's stance on Brexit, the Irish foreign affairs minister said. Simon Coveney said the government's position had not changed and will not change because of Theresa May leaving her role.
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UK inflation eased in May but was in line with both analyst forecasts and the Bank of England's target rate, data from the Office for National Statistics showed. Meanwhile, producer prices also softened in May, while house prices continued the trend of a "general slowdown" in growth. The consumer price index rose 2.0% year-on-year in May, slower than April's 2.1% rise but in line with consensus forecasts, as cited by FXStreet. The Bank of England, which announces its latest monetary policy decision on Thursday, targets a 2.0% inflation rate for the UK. Housing and household services, with prices rising by 2.3% year-on-year, and transport, with prices up 2.7%, were among the largest upwards contributors to May's inflation rate. Meanwhile, clothing and footwear prices fell 1.6%, marking the ninth consecutive month of negative contributions from this category. In a separate report, the ONS showed output producer prices were up 1.8% year-on-year in May, slower than the 2.1% reported for April. Finally, the ONS said house prices in the UK rose 1.4% in the year to April, slowing from 1.6% recorded in the year to March.
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Donald Trump is planning an "extended meeting" with China's President Xi Jinping on the sidelines of the G20 summit in Japan at the end of June, the US president tweeted on Tuesday. Washington and Beijing have been locked in a trade war for months, with the US government imposing new tariffs on around half of all Chinese imports. Trump has threatened to extend these measures to all imports from China, and Beijing has threatened retaliatory measures. Trump said he had a "very good" conversation with Xi on the phone and that Washington and Beijing would start talks ahead of the summit. The comments come after Commerce Secretary Wilbur Ross played down hopes for a quick conclusion to the trade war, saying the best outcome from G20 talks would to reignite the negotiations rather than hash out a deal.
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Trump launched his 2020 re-election campaign on Tuesday at a mass rally in Florida, blasting his opponents as radicals, presenting himself as a political outsider and slamming the media. The president, however, did not announce any concrete new policies, focusing instead on stoking fears that his rivals would destroy the US way of life, alleging they support mass migration to the country. Trump repeatedly slammed illegal immigration, which he claimed was responsible for a decline in the middle class, along with past international trade agreements.
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The Organization of the Petroleum Exporting Countries and other major oil producers including Russia will meet in Vienna on July 1 to 2 to discuss production limits, instead of next week as originally planned. The delay was due to scheduling conflicts with next week's summit of the G20 group of major economies in Osaka, Japan, according to a source close to the OPEC meeting. OPEC and the 10 additional countries decided late last year to reduce their joint oil output by 1.2 million barrels per day during the first half of the year, a move that reduced global supplies by more than 1% off. In Vienna, they will discuss whether to extend this agreement until December. Oil prices rose steadily this year until April but have fallen since then amid worries that the US-China trade war could dampen global economic growth and demand for fuel.
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