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- Business and finance update 23rd December 2024
Business and finance update 23rd December 2024
Royal Mail taken over
Good morning. Today we're talking about the takeover of Royal Mail, the Bank of England keeps interest rates steady and a Japanese carmaker merger.
Big Stories/

Royal Mail taken over
The UK government has approved the takeover of Royal Mail by Czech billionaire Daniel Kretinsky. This decision follows the completion of a national security review under the National Security and Investment Act. The deal, valued at £3.6bn, has faced scrutiny due to concerns over foreign ownership of a critical national infrastructure. However, the government has secured commitments from Kretinsky to safeguard key aspects of the postal service, including maintaining universal service obligations and keeping Royal Mail headquartered in the UK. This approval comes despite ongoing challenges facing Royal Mail, including declining letter volumes and rising costs. The company recently reported a significant loss and has faced criticism for its service performance. The takeover is expected to be finalised in early 2025.
Rates stay steady
The Bank of England maintained interest rates at 4.75%, reflecting growing concerns about persistent inflation. While the central bank has cut rates twice this year, the recent rise in inflation to 2.6% in November, exceeding the Bank's own forecast, has prompted a more cautious approach. The decision to hold rates steady comes amidst a challenging economic backdrop. The UK economy contracted in September and October, and business confidence has been dampened by the government's £40bn tax increases in the October budget. The Bank of England has revised its growth forecast downwards, now predicting zero growth in the final quarter of the year. This decision highlights the Bank of England's delicate balancing act between supporting economic growth and combating inflationary pressures.
Japanese car combo
Japanese automakers Honda and Nissan are reportedly exploring a potential merger to bolster their competitiveness in the rapidly evolving electric vehicle (EV) market. The proposed merger would allow the two carmakers - the eighth- and ninth-largest in the world - to pool resources and collaborate on key areas such as software development, battery technology and manufacturing. This strategic alliance would enable them to better compete with global giants like Tesla and Chinese EV manufacturers. If successful, the merger would become a major player in the global automotive market, surpassing General Motors in terms of size and challenging Toyota as the top manufacturer in Japan. However, the deal faces numerous challenges and uncertainties. This development underscores the increasing pressure faced by traditional automakers to adapt to the changing landscape of the automotive industry. As the transition to EVs accelerates, strategic alliances and mergers are likely to become more common as companies seek to gain a competitive edge.
Elsewhere...
Google monopoly: Alphabet's Google proposed new limits to revenue-sharing agreements with companies including Apple which make Google's search engine the default on their devices and browsers.
Rising bills: Water bills are set to climb by an average of £157 over the next five years, the industry regulator has confirmed.'
Boardroom denial: British billionaire Mike Ashley has been denied a seat on the board of fast-fashion business Boohoo.
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