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  • Today's business and finance round up 13th December 2022

Today's business and finance round up 13th December 2022

đź”—Economy grows in October but recession still looms

13th December 2022

Bite-sized business news from the UK and beyond

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Today's stories

  • Economy grows in October but recession still looms

  • Microsoft buys stake in London Stock Exchange

ECONOMYEconomy grows in October but recession still looms

What happened?Official data released yesterday showed that the UK economy grew by 0.5% in October compared to September however economists still expect the country to tip into a prolonged recession.How did we get here?The economy shrunk by 0.6% in September mainly due to the extra bank holiday for the late Queen’s funeral. The return to the normal level of working days in October, as well a rebound in car sales and construction, helped boost output from the previous month but on a three-month basis the picture is less rosy - the economy has declined by 0.3% since the summer indicating the country’s underlying economic strength is shaky. Economists expect the UK to enter a two-year recession imminently, driven by 40-year high inflation of 11.1%, rising energy bills and housing costs triggering a slowdown in consumer spending.The Bank of England is likely to raise borrowing costs for the ninth time in a row on Thursday in a bid to cool inflation. However November inflation data, due tomorrow, is expected to show that pricing pressure is curbing, which could bring into question just how much interest rates need to rise. If the Bank raises rates too much it risks a harsher than needed recession and if it does too little then high inflation could be stubborn to shift. Next up: All eyes will be on November and December economic figures, which will be released next year. If they show the economy contracted then the UK will be officially in recession. And with the series of strikes across the country grinding many sectors to a halt and dampening economic activity, a recession seems even more likely.

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TECHMicrosoft buys stake in London Stock Exchange

What happened?Yesterday Microsoft announced it will buy a 4% stake in the London Stock Exchange Group (LSEG) in a £2.3bn deal that will see the companies collaborate on data analytics and cloud technology.How did we get here?LSEG is best known for running the London Stock Exchange and the FTSE 100, but it generates two-thirds of its revenue from the data and analytics it provides to investors and analysts. Last year it bought data company Refinitiv for $27bn making the group the world’s second largest financial data company after Bloomberg.It’s all part of a growing demand from investors for information that gives them an edge in increasingly fast electronic financial markets.Under the new partnership LSEG will:

  • Migrate its data management and cloud services on to Microsoft

  • Use Microsoft’s office-working software, like Teams, Excel and PowerPoint, to create a one-stop shop for data, analytics and collaboration tools that it can sell to finance professionals

The deal is a huge win for both sidesMicrosoft expects to make $5bn in revenue as it gains a large cloud contract with access to Refinitiv’s 40,000 customers, as well as a stake in Bloomberg’s rival.LSEG gets the tech know-how and financial backing of one of world’s biggest cloud companies. The company says the deal will “increase revenue growth meaningfully over time as new products come on-stream”.Microsoft isn’t the only Big Tech name moving into financial marketsLast year Google invested $1bn in CME, a Chicago-based stock exchange, as part of a decade-long cloud computing deal. Around the same time New York-based Nasdaq and Amazon agreed a similar partnership.

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