Today's business and finance round up 17th February 2022
😡UK threatens to pull the trigger on Russian sanctions
17th February 2022
Bite-sized business news from the UK and beyond
Good morning Yesterday, as expected, new data from the ONS confirmed that UK inflation ticked up to 5.5% in January – a new 30 year-high. Soaring energy, fuel and food prices were the main drivers. If you’re looking for practical ways to fight the rising cost of living then check out these top 10 tips.
- UK threatens to pull the trigger on Russian sanctions
- Financial regulator raises concerns over crypto exchange
UK threatens to pull the trigger on Russian sanctions
What’s going on?
The UK and other Western nations are considering imposing economic and financial penalties – or sanctions – on Russia to discourage it from invading Ukraine.
Why is this important?
In an effort to avoid an all-out war in Eastern Europe, the West are assessing the options available to urge Russia to end its ‘campaign of aggression in Ukraine’.
Last week the UK government put in place new legislation enabling it to apply broader sanctions than it previously could on Russian people and businesses supporting the Russian government. The US has already vowed to unleash “the mother of all sanctions” against Russia if it starts a conflict.
The aim of sanctions is to hit the wealthy and powerful in the targeted country where it hurts financially.
In the past three decades rich Russians have flocked to London after gaining entry via the visa investor program. Light-touch regulation, lucrative investment opportunities and a legal system that can be used to settle disputes helped attract the oligarchs many of whom have close links to the Russian government.
The UK has been accused of turning a blind-eye to Russian money but sanctions could change this.
Boris Johnson has said that measures such as stopping Russian companies from raising money on the London Stock Exchange and exposing the ownership of expensive property by wealthy Russian oligarchs could be used.
Western sanctions against Russia have already been in place since it annexed Crimea in 2014 – and with seemingly little negative effect on the economy.
Russia has said it is ready to retaliate if it gets hit with more penalties. As one of the biggest oil and gas producers it could easily turn its back on the many European countries reliant on its supplies, which would raise already elevated energy prices.
Financial regulator raises concerns over crypto exchange
The UK finance watchdog, the FCA, has sounded the alarm over the world’s largest cryptocurrency exchanges gaining access to a key British payments network.
Binance has struck a deal with payments group Paysafe to use Faster Payments - a network that oversees payments and bank account transfers in the UK. Binance customers will now be able to deposit funds in their account via this service.
Founded in 2017 Binance provides a platform for trading cryptocurrencies and has quickly become the largest in the world. Originally based in China, the company later moved to the Cayman Islands due to the increased Chinese regulation.
Cryptocurrency has come under increasing scrutiny from regulators as it’s feared that it can potentially play a role in fraud and money laundering.
Despite these concerns the FCA said it didn’t have enough power to stop Binance from accessing Faster Payments.
Last summer the watchdog ordered Binance to stop all regulated activity in the UK over worries about weak consumer protections.
Trading in cryptocurrencies like Bitcoin and Dogecoin is not directly regulated however products related to them, known as derivatives, are.
The FCA said that Binance was offering cryptocurrency derivative services without its permission.
It's estimated that millions of Brits hold crypto and the FCA is playing catch up trying to regulate the sector.
Stat of the day
The average Brit is missing out on 32.3 hours of sleep each month
Other stories to keep you in the loop
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- M&S increases minimum pay to £10 an hour
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