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EU can trounce Trump in the ongoing trade war ‘by using Brexit tactics’

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Brexit EU US Trade war

Last updated on September 24th, 2018

The German media has claimed that if Brussels adopts the same tactics it has used in the Brexit negotiations, the European Union can beat Donald Trump in a trade war.

According to Der Spiegel, a Hamburg-based magazine, both the United States and Britain “have tried to divide the European Union (EU)”. However, if member states stay united, any threats to the future of the alliance can be overcome.

The news publication said that in order to accept short term losses for long term gains, the key to the EU’s negotiating strategy is being prepared.

Markus Becker, the EU correspondent of the magazine, in his piece said that after seeing how the Brexit talks have progressed, Europeans have good reason to be confident.

He said, “In the meantime British Brexit hardliners speak of a national humiliation, and not without reason. The reason is simple: the cohesion of the common EU single market is much more important to the economy in the long term than to allow the British a pleasant Brexit. If need be, industry and governments of the EU27 are willing to accept short-term losses.”

He insisted that the same strategy of cohesion would also work for Donald Trump.

Becker said, “Like Trump, the British have tried to divide the EU. And like Trump, they also have considerable economic threat potential.”

On Wednesday, Trump met with Jean-Claude Juncker, the European Commission President. Both of them seem to end the trade war between the traditionally close allies.

Donald Trump in June imposed levies on steel and aluminium imports which gave rise to tit-for-tat tariffs. Responding to that, Brussels composed a list of American-made products to hit them with levies.

Trump had threatened to target the automotive industry and expand his trade war. This move would have hit Germany severely.

However, as per the talks at the White House, both the sides agreed to stop on imposing any more tariffs, until further discussion on the trade takes place.

Trump’s pledge to not impose levies on European-built cars is against his threat. This has proved to be a big win for Brussels. He said that the EU has agreed to purchase “lots of” soybeans from American farmers.

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Will Four-Day Week Policy be Accepted by Britons?

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Four-day week policy

Last updated on May 20th, 2019

Ed Whiting, strategy director at the Wellcome Trust – a large biomedical research foundation in London – first came up with the idea of a four-day week policy at workplaces. The leaders of Trade Union and the citizens have been talking about introducing this policy at their workplace since then.  

“Could we improve both the productivity and well-being of Wellcome staff and at the same time improve the overall impact we have as a charity?” said Whiting.

Recently in a tweet, Labour politician John McDonnell wrote that his party has commissioned Robert Skidelsky to begin an inquiry into the Shorter Working Time. He said that Skidelsky’s recommendations would help in deciding whether the reduction in the work time would prove useful.

Lured by the four-day week policy, people in the country asserted that shorter weeks can make an individual less ill, less prone to mistakes, more productive and stress free.

Taking a note of the positive effects brought by the policy, several smaller companies have already shifted to four days a week. But, the policy posses a great challenge to the large non-profit organisations in the country. Without any backup, the policy would bring a significant drop in the larger businesses.

As detailed by Whiting, many of the Wellcome workers were excited with the four-day week policy, while there were others who worried that they would have to finish their five days work in four. He added that some of the part timers at the Trust were concerned that a new working week would mess up with their routine and the other groups believed that four days a week would distract the charity from its focus.

Amidst the arguments about policy’s favour and opposition, it is evident that shorter working weeks cut out huge carbon emissions. However, the policy has been receiving a mixed response from the people across the globe.

Almost three years ago, Glasgow’s Pursuit Marketing firm switched to a four-day week policy without cutting its employees’ salary. Following the shift, the company noticed an increment in productivity by 30 percent, with additional number of people wanting to work for them.

Due to the wide controversies related to the four-day week policy, the Wellcome Trust has planned to make better arrangements for its 800 employees. In addition, there is a need for the government to look into alternative ways to bring flexibility for the working class. Though, it has been largely noticed that a stress free environment brings more productivity, leading to business gains.

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Court Revives Walter Merricks’ Claims against MasterCard

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Mastercard

The Court of Appeal on Tuesday revived Walter Merricks’ claim, which was initially brought against the MasterCard Corporation on behalf of millions of consumers in the country. The court’s ruling stated that the Competition Appeal Tribunal had applied the wrong legal test in making its final decision against the claim made two years ago and thus they must reconsider the case.  

Merricks, former financial ombudsman, had claimed that around 46 million people in the country have paid higher prices while making purchases through a MasterCard. This was because of unlawfully imposed high card fees. Merricks asserted that the claim followed the European Commission’s decision of 2007, which stated that MasterCard’s interchange fee was in breach of competition law.

Thus, £14 billion damage claim was brought against the corporation as a legal action, on behalf of the people who claimed to be the victims. If it becomes successful, then every adult in the country would be liable for a payout of £300 from MasterCard.

The critics insisted that over the past few years, MasterCard has broken the law several times by imposing excessive card transaction charges, which has left its consumers in a total loss.

Representatives from MasterCard have continuously disagreed with the basis of the claim, and in response to the court’s ruling argued, “This decision is not a final ruling and the proposed claim is not approved to move forward; rather, the court has simply said a rehearing on certain issues should happen.”

While the revival of Walter Merricksrejected claim pleased everyone in the country, the firm said that it would seek permission to appeal against the ruling to the Supreme Court. Merricks’ solicitor Boris Bronfentrinker, from Quinn Emanuel Urquhart & Sullivan, called the court’s decision a “landmark day for all UK consumers that Mr Merricks seeks to represent”.

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MPs Ask Division of “Big Four” Firms for Better Quality Audits

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Big Four

Members of the Parliament have asked for the separation of the “big four” accountancy firms into multiple units after the collapse of Carillion and BHS. This demand is being made so that the future audit of any big company is not affected and the confidence remains in the “big four”.

However, the documentation of research by the Business, Energy and Industrial Strategy (BEIS) Committee has asked for “full structural break-up” of KPMG, Deloitte, PwC, and EY into audit and separate consultancy businesses.

As per the MPs, division of “big four” would be beneficial in managing the disagreement. It would also help in providing the “professional scepticism” required to furnish high quality audits. The final report on the structural break-up of “big four” will be provided soon by the Competition and Markets Authority (CMA).

The preliminary plan of the report consisted only of an operational split between audit and advisory work. The scheme also consisted of cross-checks on audits to increase its quality and competitiveness.

The BEIS Committee’s report has also increased pressure on the CMA by asking them to increase the frequency of audit rotations. This step is taken to avoid informal relationships between auditors and their clients.

Audits to check for material fraud were asked as well, after Grant Thornton, head of an accountancy firm said to the committee that the auditors do not check for fraud during the audits, post collapse of Patisserie Holdings.

BEIS Chairwoman, Rachel Reeves said “For the big firms, audits seem too often to be the route to milking the cash-cow of consultancy business. The client relationship, and the conflicts of interest which abound, undermine the professional scepticism needed to deliver reliable, high-quality audits. Splitting audit from non-audit business would be a big step to boosting the culture of challenge needed to deliver high-quality audits.”

She also said that “We must not wait for the next corporate collapse. Government and regulators need to get on and legislate to deliver these reforms and ensure that audits deliver what businesses, investors, pension-holders and the public expect.”

CBI’s deputy director general, Josh Hardie, said that the committee’s idea to break-up the “big four” was an action decided in haste.

He said, “It puts forward a heavy-handed solution rather than waiting for the evidence of the reviews investigating the state of the current market and future vision for audits….”

After listening to every side of the demand, it can be said that there is need for a better policy for the separation of the “big four.” This is necessary to make sure the separation does not affect either the corporate companies, the trust of public, and/or the confidence of the investor.

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Edward Bramson to be Kept Away from Barclays’ Board

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Edward Bramson

Barclays’ bosses in their recent deliberation asked shareholders to maintain distance from Edward Bramson also known as the ‘toxic’ corporate raider. The warning has come up in context to the board voting that is due to take place.

Barclays’ heads have been extremely concerned about the moves taken by Bramson to be a part of the board. It has been stated that he has been indulged in influencing and pushing investors at Barclays to vote for him in order for him to get a position in the board.

Barclays chairman John McFarlane has stressed that such a decision can be worrisome and asked investors to ensure that Bramson should be blocked from becoming a non-executive director for the sake of all shareholders.

As per stats, Edward Bramson controls 5.51 percent of Barclays’ stakes and is interested in slashing its prized investment. In order to address the concerns related to his intents, the Chairman is taking certain steps like warning the investors.

Chairman McFarlane, in order to address the concern, disclosed the case to the stakeholders in a strong letter to the investors. In his letter, he has openly addressed the issue of Bonus. As per his explanation, if Bramson succeeds in achieving his intended position, it would lead to a complicated Bonus structure that will further lead to Bramson procuring tens of millions of pounds in fees.

McFarlane said, “Mr Bramson would likely seek to undertake a new round of restructuring and review which, in our view, would significantly destabilise the group, impede progress and result in a destruction of shareholder value.

“The board believes that the interests of Mr Bramson are fundamentally misaligned with the interests of shareholders.”

He further explained that “Based on his track record, the board believes the presence of Mr Bramson on the board would be unnecessarily destabilising for management and the talent we employ more broadly.”

The chairman also warned about Bramson’s plan for cuts have already been dismissed because they are not in the interest of profit generation.

He also said that though Edward Bramson has the record of turning around failing business but his approach to this involves sacking of managers, cutting the staff which is not a solution but raises various operational problems. And this time he is eying Barclays.

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Uncertain Brexit Deal Propels Stressed Housing Market

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Brexit Deal

Last updated on March 21st, 2019

This month is undoubtedly the most crucial for Britain, which is due to leave the European Union anytime soon. In an already messed up decision, several unexpected and terrible circumstances have surfaced in the three years since the public referendum.

While the chaos only escalates, the uncertainties for the UK market are also soaring. Particularly, the housing market is in dismay due to the approaching Brexit deadline and no clarity over the deal.

The conflict between the Tory MPs and Prime Minister Theresa May over the twice-negotiated and defeated withdrawal agreement, is going through a series of votes in the Parliament. Recently, the MPs voted in favour of extending the Article 50 to the end of June, but the final decision depends on the unanimous vote of the EU member states.

As the Parliament has voted down the withdrawal agreement, a no-deal Brexit remains a default position in case no agreement is reached between Britain and the bloc. The vagueness of the outcome and the potential consequences of a no-deal, have left several real estate businesses and financial experts in a dilemma.

Last year in September, Bank of England governor Mark Carney raised a warning that leaving the union without a deal could lead house prices tumbling by a third. In February, he added that the UK’s growth would be ‘guaranteed’ to fall in the event of a no-deal Brexit.

House market experts analysed that since the Brexit vote in June 2016, the property prices did slug. The pattern also reflected seasonal changes, where the prices went up in spring and remain stagnate during summer, during both 2016 and 2017.

Besides, in the post-summer period of 2018 with Brexit deadline approaching, the house prices suffered a bigger dip. Statistics reveal that they went down to £230,630 in November from £232,797 in August. An year-on-year house price analysis also reflected that in the year after the referendum the rate of property prices growth dropped everywhere in the UK, except Scotland.

While the lawmakers are striving to strike the best possible deal before March 29, the prospects are much lower considering the feuds. Industry experts have highlighted that the Brexit is capable of having range of affects on the UK housing market, both before and after the exit.

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