Today's business and finance round up 15th February 2022
😣Markets take a beating as Ukraine invasion fears rise
15th February 2022
Bite-sized business news from the UK and beyond
Good morning In a bid to distance itself from the bird, Turkey has announced plans to rebrand as Türkiye. The country adopted the name Türkiye after it declared independence almost a century ago but ‘Turkey’ stuck among Western nations.
It’s not the only nation to opt for a name change – in 2019 the Netherlands dropped the name Holland, while in 2016 the Czech Republic announced it wanted to be known as Czechia.
- Markets take a beating as Ukraine invasion fears rise
- JD Sports and Footasylum fined £5m for secret meetings
Markets take a beating as Ukraine invasion fears rise
What’s going on?
Stock markets around the world were shaken over concerns that a Russian invasion of Ukraine was becoming more likely.
Travel companies, banks and businesses with major operations in Eastern Europe were among the hardest hit.
Why is this important?
The first two months of 2022 have been a turbulent ride in the stock market. Fears of slowing economic growth, runaway inflation and rising interest rates have seen global equities swing wildly in volatile trading sessions.
Yesterday the FTSE 100 finished 1.7% lower while the FTSE 250 fell 2.0% amidst heightened geopolitical tensions between Russia and the West. Over the weekend the US reported that a Russian invasion of neighbouring Ukraine was a the “very distinct possibility” as Russian troops continue to position themselves near the border. Russia has continued to deny that it’s planning to invade.
The crux of the disagreement is that Russia doesn’t want Ukraine to join NATO, the Western military alliance that was created to counter the Soviet Union.
Russia is a major oil and gas producer and a war could cause serious interruption to supplies. The threat of an imminent conflict saw oil prices hit a new seven-year high and European gas prices jump.
Higher energy prices globally have already been a major reason behind the 30-year high UK inflation rate at 5.4%.
The travel sector came under pressure as the possibility of a European war would restrict flight paths in the continent. Shares in British Airways owner, IAG, fell 6%. But the biggest faller on the UK stock market was steelmaker Evraz that has mines in Russia and Ukraine, its shares dropped almost 30%.
In addition to the human cost, a war would also stoke inflation and uncertainty across the world as a fragile global economy emerges from the pandemic. With this mind, Western leaders are frantically trying to work out a diplomatic resolution. But the path to a peaceful outcome is far from certain so it’s likely that there are more bumpy days in the market ahead.
JD Sports and Footasylum fined £5m for secret meetings
Covert meetings in car parks, hiding records from regulators, no this isn’t the plot of a spy movie but what the Competition and Markets Authority (CMA) has accused JD Sports and Footasylum of doing.
Back in 2019 the two sportswear retailers announced they would be merging but after an in-depth investigation, the competition regulator blocked the deal twice claiming that it would lead to worse outcomes for consumers.
The CMA's role is to make sure that consumers get a fair deal. It first blocked the deal in 2020, arguing that the merger would mean customers would likely face “higher prices, less choice and a worse shopping experience”.
During the investigation the companies are not allowed to share any sensitive commercial information or integrate in any way.
The CMA found that the CEOs had secretly met in car parks, caught on video, and deleted meeting records. As a result the companies were fined £5m in total.
JD Sports has maintained its innocence saying that it “always acted honestly and in good faith in its efforts to comply” with the CMA. The bosses of the two retailers, who have known each other for over 25 years, say they met in the car park to discuss their future roles in the potential combined business and a personal matter involving a family member.
Stat of the day
Americans consumed an estimated 1.4bn chicken wings during Sunday's Super Bowl
Other stories to keep you in the loop
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- Petrol prices surge to fresh record high
- One-third of Brits still working from home despite rule changes
- Sadiq Khan hits Londoners with biggest tube and bus fare hike in a decade
- HSBC to double junior banker pay in the race for talent
- Hundreds of ‘lives ruined’ by Post Office scandal, inquiry hears
- Four buy now, pay later firms change ‘potentially unfair terms’
- Ministers to set out long-awaited shake-up of audit regulations
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