Today's business and finance round up 1st July 2021
📜New rules on government bailouts
1st July 2021

Good morning Can you believe we’re already half way through the year? Today also marks the beginning of the phasing out of Covid related government support measures. Furlough is being scaled back and VAT payment deferrals and business rate exemptions are coming to an end.
Today's stories
New rules on government bailouts
Aussie bank’s £1bn bet on UK rental market
Yesterday's market moves
FTSE 100 -0.7% 7,037 FTSE 250 -0.7% 22,376
Markets drifted lower as the Delta variant of Covid-19 continued to cause concerns for investors. Earlier, data showed the UK economy decreased by 1.6% in the first three months of this year from the final quarter of 2020, slightly more than the 1.5% expected.Elsewhere, outgoing Bank of England Chief Economist Andy Haldane used his final day to issue a warning, predicting that year-end inflation will be “nearer [to] 4% than 3%” – it’s currently 2.1%. He urged colleagues to shift their attention from stimulating the economy to controlling the pace of price increases.
ECONOMYNew rules on government bailouts

What’s going on?In another chapter of post-Brexit law changes, the UK government is doing away with the previous EU rules on how it can bailout businesses.Under new legislation this type of support, known as state aid, will give the government and local councils more flexibility to step in to help struggling companies.The regime will come into effect in 2022 subject to Parliamentary approval.
Why is this important?
Before Brexit the UK had to get approval from EU for state aid – a lengthy administrative process which the government says delayed vital funds from reaching businesses in time.The government says the new rules will allow bailouts to be quicker and targeted at the right businesses. It’s hoped it will help even out economic growth across the UK and drive green initiatives.It also said that it would not be a return to the failed 1970s approach of government trying to run the economy, ‘picking winners’ or bailing out unsustainable companies.The new state aid rules have been badged as one of the most important post-Brexit changes to date. Compared to the likes of France and Germany, the UK has historically been less prone to intervening to stop businesses failing. The government has said they don’t expect the level of their intervention to change.
Takeaway
The legislation is not without its critics. One of the battlegrounds during the Brexit negotiations was that the EU wanted to ensure there was a level playing field for competition. It’s worried that the new rules could give British companies an unfair advantage. The EU will be watching the wording of the bill closely to make sure that’s not the case.
PROPERTYAussie bank’s £1bn bet on UK rental market

Macquarie, one of the largest Australian banks, is stepping into the British rental market with the creation of a £1bn investment fund.It’s looking at London and other UK cities to buy, develop and operate multi-family housing complexes, it said in a statement yesterday.During the pandemic an estimated 700,000 people, mostly young professionals, left London but Macquarie is betting that they return as lockdown restrictions ease.Property is a popular choice for investors due to the lack of supply of homes and as house prices become more unaffordable for the average person, demand for renting is expected to grow in the long term. Other banks are making similar moves. Earlier this month Lloyds became the first major UK lender to become a private landlord after it bought a block of flats in Peterborough that it will rent out.However, there are concerns that if big financial institutions buy up private property then this will make it even harder for first time buyers to get on the property ladder.
Stat of the day

In the UK the average woman is paid 16% less than a man
Other stories to keep you in the loop
British savings jump during lockdown
Dixons Carphone bets on hybrid model as online sales surge makes up for lockdown woes
Microsoft and Google prepare to battle again after ending six-year truce
700m LinkedIn accounts allegedly for sale following data breach
UK space start-up OneWeb gets $500m investment
